In a stunning upset, Donald Trump won Tuesday night's election, meaning he will be the 45th president of the United States. Financial markets slumped on the news, as Trump's unconventional behavior and ambiguous policies have caused concern about the future of the U.S. economy. (See also: Equities Plunge, Gold Rallies as Trump Elected President.)
When news with potentially serious consequences for markets, the economy and personal finance breaks, Investopedia tends to see a spike in visits to our financial dictionary. That was true when Lehman Brothers collapsed, when the debt ceiling began a matter of national and international concern, and when fears of Grexit began to call the euro's future into question. It has been especially true during this presidential cycle, when debates saw a rise in searches for terms such as NAFTA, GDP and – ominously – racketeering.
In light of the 2016 election's result, here's what you're most interested in learning from our site:
- Black Swan: a black swan event is one that deviates from the mean and would be considered an upset. Some historical black swan events are the 2008 financial crisis, the dot-com bubble, and, our readers seem to be suggesting, last night's victory by Trump.
- Dodd-Frank Wall St Reform: approaches Wall Street reform were at the center of the big debate throughout the election and in particular Obama's signature 2010 regulatory law. Dodd-Frank was introduced after the 2008 financial crisis as Congress sought to reform behavior on Wall Street. In May of this year, Trump voiced his concern that the act is holding back the growth of the private sector. "It makes it very hard for bankers to loan money for people to create jobs, for people with businesses to create jobs. And that has to stop," Trump said. Also under threat is Obama's other major legislative effort, the Affordable Care Act.
- Futures Market: a futures market is a market where investors buy and sell financial instruments that are set for a specific delivery date. This morning, readers woke up to news that the U.S. equity and other futures were tanking. Meanwhile gold futures, which traders often seek out in times of stress and uncertainty, rose by as much as 3.5% in the immediate aftermath of Trump's victory.
- Limit Down: limit down is a term that describes the maximum amount by which a futures contract's price can decline before the market is halted. Last night, as investors headed for the doors, trading in S&P 500 and the Nasdaq futures was halted after they hit their 5 percent limit down threshold.
- Brexit: the win by Trump is being compared to the Brexit vote in the U.K. The rise of the populist movement was evident with both Trump and the Brexit supporters. A disgruntled middle class who fear immigration and globalization have won the two biggest political votes of 2016. In addition, pollster erroneously projected a win for the establishment position in both the Brexit vote and the U.S. election, calling their methods into question.
- Stock Market Crash: a stock market crash is a rapid sell-off in the value of a stock market. Last night investors feared that the result of the election could lead to a crash in the U.S. stock market as sentiment amongst investors remains uncertain. The most recent stock market crash occurred when U.S. stocks fell by more than 50% in 2008.
The picture the searches above paint is not pretty. Readers see Trump's election as a black swan even, like Brexit, one which sent the futures crashing and has the potential to leave to a stock market crash. There is no guarantee that this fear will come to pass – stocks have recovered as of Wednesday afternoon – but anxiety is not something to ignore.
The Bottom Line
Last night's election result has many waking up and wondering what lies ahead. As people head to the internet for answers, the overall theme of our readers behavior is uncertainty.