Stock prices rose to record highs, the dollar strengthened globally and Treasury yields rose on Wednesday following a final victory for President-elect Donald J. Trump.

The reaction is partly typical after a presidential election, with a flurry of activity as the result of the vote becomes clear, ending months of uncertainty. But analysts and investors noted that the reaction looked stronger than just relief, as traders prepared for more government spending, reduced regulation, larger deficits and accelerated growth under a Trump administration and at least partial Republican control of Congress.

“What we are seeing is an instinctive reaction to a surprising result in the face of very close polls,” said Kristina Hooper, chief global market strategist at Invesco. “The markets react positively to a decisive victory.”

U.S. stock markets had risen steadily overnight after votes were counted and soared as trading opened on Wednesday. The S&P 500 rose 2.5 percent, its biggest daily gain in about two years, while the tech-heavy Nasdaq Composite Index rose nearly 3 percent. The Dow shot up 3.6 percent. The Russell 2000, which tracks smaller companies thought to be more sensitive to the fate of the economy, rose nearly 5 percent, its biggest one-day rise in about two years.

All four indices reached record highs at the end of the trading day.

Bitcoin rose sharply and also reached a record. Mr Trump has promised to end the Biden administration's regulatory push against cryptocurrencies and establish the United States as the “crypto capital of the planet.”

The U.S. dollar rose against the currencies of major trading partners – such as the Japanese yen as well as the euro, Mexican peso and Chinese renminbi – which were expected to be hit hard by Trump's proposal to significantly increase tariffs. The euro posted its biggest daily decline against the dollar in more than four years. The most important stock indices worldwide collapsed.

In October, investors began pushing yields higher and pushing the dollar higher as they saw a better chance of a Republican victory. Mr. Trump's proposed tax, trade and immigration policies could spur economic growth, boost inflation and increase government spending. Analysts expect the result will be higher interest rates over time.

The 10-year Treasury yield rose 0.2 percentage points on Wednesday – a big rise in this market and the largest in more than two years – to more than 4.4 percent.

The market moves highlight the challenge now facing Federal Reserve officials, who are widely expected to cut interest rates when they meet on Thursday. Mr. Trump's policies will stimulate the economy, and the Fed appears to have curbed them enough to curb inflation, worrying some investors.

A market measure of 10-year inflation expectations rose a tenth of a percentage point to 2.4 percent on Wednesday, the biggest daily increase since early 2023. Fed officials want to keep inflation at 2 percent over time.

“However you break it down, we believe inflation risks are higher now,” said Calvin Tse, head of macro strategy for the Americas at BNP Paribas.

Whether the stock market rally will continue “depends on what the Fed has to say tomorrow,” said Steve Sosnick, chief strategist at Interactive Brokers. “If bonds really freak out, I think it will be difficult for the stock market to go too far. If bonds calm down, the rally can continue.”

Global investors are reacting

Investment advisers in Asia and Europe reported a long day and night spent answering calls from clients as the election results emerged and discussing the possible impact of Mr. Trump's victory.

“We are all waiting to see whether his second term will be the same or different,” said Joy Yang, head of Asian economics and strategy research at hedge fund Point72. “The broad market consensus – there is very little understanding of what his plans are this time.”

Stock markets in Europe rose sharply in early trading on Wednesday, but gave up those gains in the afternoon and ended with a small loss.

European government bond yields fluctuated. Investors' initial bets that central banks would cut interest rates more to bolster the region's economies, particularly export-oriented countries like Germany, gave way to the prospect of higher inflation due to weaker currencies. “The market clearly has yet to settle on a consensus narrative,” analysts at Rabobank said.

There were some early losers in European markets, however, as shares of German automakers BMW and Daimler and Danish renewable energy company Orsted fell on expectations of higher tariffs and less aggressive climate targets.

German business leaders warned that a second Trump term would further endanger the country's stagnating economy. The USA is the largest buyer of German products, especially pharmaceuticals, machinery and cars.

“The clear result of the US elections is a wake-up call for Germany and Europe,” said Siegfried Russwurm, President of the Federation of German Industries.

Across Asia, stock markets extended Tuesday's gains. In Japan, the leading index Nikkei 225 rose by 2.6 percent. Stocks in mainland China fell slightly, with Hong Kong's Hang Seng Index falling 2.2 percent.

Bruce Pang, chief Greater China economist at JLL, a real estate and investment management firm, said stocks in Hong Kong fell because companies listed there were more exposed to a weaker Chinese currency.

Mr Trump's more protectionist policies could also mean Chinese policymakers will focus more on boosting domestic demand in the economy rather than expecting exports to boost growth.

“There will be geopolitical tensions, but it is even more predictable,” Mr. Pang said of a Trump victory. “There’s some history there.”

The “Trump Trades”

In volatile cryptocurrency markets, Bitcoin rose 6 percent to over $74,000 in the last 24 hours, surpassing a record set in March. Mr. Trump had presented himself as a crypto supporter during the campaign, and crypto lobbyists spent over $130 million in a largely successful attempt to elect congressional candidates who would support their industry.

This year, uncertainty over the election outcome and fear of a disputed result have driven money into gold, which is considered a safe investment in turbulent times. But with Mr. Trump's victory, gold prices, which were nearing record highs, fell.

Shares of Tesla, the electric vehicle company owned by Elon Musk, who has emerged as one of Mr. Trump's most prominent supporters, rose nearly 15 percent. Mr. Trump could ease regulatory scrutiny of Tesla. He has promised to appoint Mr. Musk to head a panel on “government efficiency.”

Shares of private prison companies rose, with Geo Group rising more than 40 percent. Private equity firms also performed well on hopes of more deals and looser regulations.

More broadly, sectors expected to benefit from economic growth, such as financials and energy, saw the biggest gains following Mr. Trump's election victory. JPMorgan Chase, the country's largest bank, rose more than 10 percent, its best day in years.

The stocks that posted losses, on the other hand, were predominantly in defensive sectors such as real estate and utilities.

But no stock is more directly tied to Mr. Trump's political fortunes than Trump Media & Technology Group, the parent company of Truth Social. Mr Trump is the social network's most important user and largest shareholder. The company's shares were largely traded as a proxy for its political fortunes.

Trump Media's stock price fluctuated wildly on heavy volume, rising as much as 30 percent at one point before settling at a gain of about 6 percent.

Claire Fu contributed to reporting from Seoul, River Akira Davis from London and Melissa Eddie from Berlin.