Stocks and Bitcoin rise after Trump victory. The same goes for inflation worries if the Dow Jones goes to 1,500

NEW YORK (AP) — The U.S. stock market, Elon Musk's Teslabanks and Bitcoin All rose sharply on Wednesday as investors placed bets on what Donald Trump's return to the White House will mean for the economy and the World. The losers include the market: the renewable energy industry and potentially everyone who is worried higher inflation.

The S&P 500 gained 2.5%, marking its best day in nearly two years. The Dow Jones Industrial Average rose 1,508 points, or 3.6%, while the Nasdaq Composite gained 3%. All three indices surpassed the records they had set in recent weeks.

The US stock market has tended to increase in the past regardless of which party wins in the White House, with Democrats making larger gains on average since 1945. But under the surface, Republican control could mean big changes in the winning and losing industries, and investors are increasing the bets previously placed on what those are higher tariffs, lower tax rates and less regulation that Trump's favors will mean.

“Markets are trying to figure out what happens next, but for now the market is pricing in a higher growth and inflation outlook,” said Peter Esho of Esho Capital.

Of course, how much change Trump will effect in his second term will likely depend on whether his fellow Republicans win control of Congress, and that is the case still to be determined. That could create room for setbacks in some of Wednesday's big, knee-jerk moves.

Nevertheless, after Trump's dramatic victory, the market is split between clear winners and losers. Including:

Bank stocks, UP

Bank stocks led the market higher, partly on hopes that a stronger economy would lead to more customers taking out loans and paying them back with interest. They also rallied on hopes of more lenient regulation from a Republican White House. JPMorgan Chase rose 11.5%, and financials posted by far the biggest gain among the 11 sectors that make up the S&P 500. Capital One Financial rose 15% and Discover Financial rose 20.2%, representing some of the market's biggest gains on impending speculation. Under Trump, the merger will be more easily approved by the federal government.

Crypto, UP

Trump has promised to make the country “the” country Cryptocapital of the planet” and create a “strategic reserve” of Bitcoin. According to CoinDesk, the Bitcoin price reached an all-time high of over $76,480 and was most recently at just under $76,100. Companies in the crypto industry also saw a jump, including trading platform Coinbase's 31.1% rise.

Tesla, U.P

Musk has become a close ally of Trump and has endorsed the former president's candidacy. While Trump could ultimately hurt the electric vehicle industry broadly by limiting government subsidies, analysts say Tesla could gain some advantage by already being such a big player in the industry. Tesla rose 14.8%, while rival Rivian Automotive fell 8.3%.

Trump Media & Technology Group, UP

The Company behind Trumps Truth Social The platform rose 5.9% after rising nearly 35% earlier in the day. The company regularly relies more on Trump's popularity than his profit prospects. His promotion came even after his submission unaudited financial documents Regulators said Tuesday that the company lost $19.2 million in its most recent quarter and that its sales weakened compared with a year ago.

Private Prison Operators, UP

A Trump-led Washington could push for stricter enforcement of the country's borders, which could mean more business for companies that work with U.S. Immigration and Customs Enforcement (ICE). GEO Group, which operates ICE processing centers, rose 42.1%.

Smaller company stocks, UP

Trump's “America First” policy could help companies that focus on customers in the United States rather than large multinational corporations that could suffer from increased tariffs and protectionism. The Russell 2000 index of smaller stocks considered more domestically focused than the large stocks in the S&P 500 rose 5.8%. That was more than double the gain of the S&P 500.

Government bond prices are falling

Investors expect Trump's policies to potentially lead to stronger economic growth, helping to lower Treasury bond prices and boost their yields. Trump tax cuts could also cause the U.S. government's deficit to rise further, increasing its borrowing needs and increasing yields even further. The yield on the 10-year Treasury note rose to 4.43% from 4.29% late Tuesday, marking a major move for the bond market. It has increased significantly compared to August when it was below 4%.

Inflation worries, UP

Investors also expect Trump's policies are likely to increase future inflation, particularly tariffs, which can weigh on U.S. household bills.

“Trump keeps telling people openly that he will increase tariffs not just on China, but on all trading partners,” said Andrzej Skiba, head of BlueBay US fixed income at RBC Global Asset Management. “We are talking about 10% tariffs for all global partners. This is a big deal because it could increase inflation by 1%. If you increase inflation numbers by 1% next year, we should say goodbye to rate cuts.”

A decline in immigration could also lead to a shortage of available workers for employers, which could force companies to raise wages for workers more quickly and put more upward pressure on inflation.

Expectations of interest rate cuts, USED

Much of Wall Street's record run this year was based on expectations impending interest rate cuts by the Federal Reservenow that inflation seems to be on the way back to its 2% target. Loose interest rates help stimulate the economy, but can also increase inflation.

The Fed will announce its latest interest rate decision on Thursday, with a cut still expected, according to data from CME Group. However, traders are already scaling back their forecasts for how many interest rate cuts the Fed will make by the middle of next year.

Foreign currencies are falling against the dollar

Trump has vowed to sharply increase tariffs on imports from China, Mexico and other countries, fueling concerns about trade wars and disruption to the global economy. A measure of the value of the U.S. dollar against several major currencies rose 1.6%, meaning those other currencies fell.

The euro fell 1.5% and the South Korean won fell 1.2% Mexican pesowhich has fallen against the dollar since the summer, partly due to concerns about Trump's possible re-election, fell early in the day but then pared its loss.

Renewable Energy Stocks, DOWN

Trump is a fan of fossil fuels and promotes the development of oil and natural gas. His victory led to a significant decline in solar stocks, including a 10.1% decline for First Solar and a 16.8% decline for Enphase Energy.

The only stock with a larger loss in the S&P 500 was Super Micro Computer, whose sales for the latest quarter may be below previous forecast. The stock fell 18.1%.

Overall, the S&P 500 rose 146.28 points to 5,929.04. The Dow rose 1,508.05 to 43,729.93 and the Nasdaq Composite jumped 544.29 to 18,983.47.

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AP writers Zimo Zhong, Elaine Kurtenbach, Kirstin Grieshaber and Kelvin Chan contributed to this report.