Following his stunning upset victory in the U.S. presidential election President elect Donald Trump made conciliatory remarks that helped financial markets worldwide erase a big chunk of the losses they experienced earlier on Wednesday.
Though there remains a great deal of uncertainty over the geopolitical, immigration and trade policies of Trump, investors appeared to be soothed by the victory speech he made where he praised his opponent Hillary Clinton and he urged all Americans to unite as one following a campaign season that was deeply divisive.
The DAX in Germany was only down 0.7% while the FTSE 100 in London was off 0.1%. The Dow futures in the U.S. were down 1.7% but that was far less than what was originally anticipated.
One industry analyst said that the reaction seen has been tempered by the conciliatory and emollient nature of the acceptance speech given by Trump and because of the doubt that always existed that pollsters could be wrong.
As Trump increased his lead in the electoral votes investors started to become unnerved and shares started to tumble across Asia, which opened while the election results in the U.S. were still being counted.
At one point, the futures for the Dow was down over 4%, but when it came time for Trump to talk after being declared the winner the financial markets had already steadied.
The U.S. dollar was able to recoup part of the ground it lost, while assets many investors seek during times of uncertainty like Swiss francs and gold, came off their earlier highs.
However, one currency, the Mexican peso, remained heavily down, as it dropped 8.5% due to the thought of a wall being built along the border of the U.S. and Mexico.
In addition, trade deals such as the North American Free Trade Agreement have been threatened to be ripped up by Trump.
One analyst said that if Trump can follow through and carry out his threats of a wall and eliminate NAFTA, then activity in Mexico will suffer immensely.
Trump will not become president until January, but almost immediately a transition will start and he will begin to announce members of his cabinet.
Investors will begin to look to see if Trump will cause further problems with his rhetoric that helped to polarize Americans and often caused investors to become spooked in the global financial markets.