NEW YORK — On Wednesday, U.S. stock markets jumped significantly, closing at historic highs following Republican Donald Trump’s unexpected victory in the 2024 presidential election, taking back the presidency four years after leaving the White House.

The Dow Industrials, S&P 500, and Nasdaq Composite all reached record levels, with investors optimistic about potential tax cuts, reduced regulations, and a president who openly discusses economic matters, though the introduction of new tariffs could lead to challenges such as increased inflation and a larger deficit.

Trump’s victory stimulated a surge in stocks tied to his previous policies, which drove U.S. Treasury yields higher, with the benchmark 10-year note yield reaching a four-month high of 4.479%. Bitcoin also soared to a new high, surpassing $75,000, while the dollar was set for its largest one-day rise since September 2022.

Pre-election polls suggested a very close race, with concerns that the results might take longer to finalize.

“Investors were adjusting their portfolios in anticipation of an uncertain outcome, which looked like it could go either way,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

“The situation shifted rapidly, leading to a strong risk-on sentiment today, where sectors focused on growth are seeing significant increases,” Luschini added.

In early trading data, the S&P 500 climbed by 145.04 points, or 2.51%, closing at 5,927.80 points, while the Nasdaq Composite increased by 539.48 points, or 2.93%, ending at 18,978.65. The Dow Jones Industrial Average rose 1,504.51 points, or 3.56%, finishing at 43,726.39.

These results marked the highest one-day percentage improves for both the Dow and S&P 500 since November 2022.

Financial stocks led the way as the top-performing sector among the 11 major S&P 500 categories. Banks, which are expected to benefit from regulatory changes under Trump, saw their stocks surge, with the S&P 500 bank index up about 10%, its largest increase in two years.

The small-cap Russell 2000 index hit a three-year peak, as stocks with a domestic focus are likely to thrive under less stringent regulations, lower taxes, and reduced exposure to tariffs. However, increased Treasury yields may pose challenges for smaller firms that depend heavily on borrowing and are more susceptible to interest rate hikes.

“If interest rates continue to rise beyond the 4.4% to 4.5% range and revisit the 5% levels we observed last October, it could negatively impact small caps and the broader market,” Luschini warned.

The CBOE Volatility Index, known as Wall Street’s “Fear Gauge,” fell to its lowest level in six weeks, reaching 15.44.

The real estate and utilities sectors, which are sensitive to interest rate changes, were among the few that declined today as investors considered how Trump’s policies might raise inflation and influence the Federal Reserve’s interest rate strategies, which have been critical to the recent stock market surge.

The Federal Reserve is widely anticipated to lower the benchmark interest rate by 25 basis points in its upcoming meeting. Still, traders have begun to reduce expectations for a rate cut in December and for further reductions in the coming year, per CME’s FedWatch Tool.

Stocks believed to benefit from Trump’s possible second term also saw increases, particularly Trump Media & Technology Group, which experienced volatile trading, while Tesla shares rose sharply, aided by CEO Elon Musk’s support for Trump during his campaign.

Shares of companies in cryptocurrency, energy, and private prison sectors also saw strong gains, while renewable energy stocks declined.

Markets are also closely observing whether the Republican Party can maintain a majority in the House of Representatives after securing control of the U.S. Senate, which would likely ease the path for a Trump agenda.

(This story has been updated with new information.)