(CNN) – On Wednesday morning, my inbox was filled with notes from analysts wanting to talk about the upside of the election for various sectors. Financial stocks such as banks and credit card companies are poised to thrive. The same goes for private prisons and the companies that are expected to eventually help carry out mass deportations. Cryptocurrency enthusiasts were especially vocal, celebrating the success of the candidate who promised them the Moon.
When the New York Stock Exchange opened, enthusiasm for these so-called Trump deals skyrocketed. All three major indexes soared, a sign of relief among investors after the quick win. The Dow Jones Industrial Average had one of its best days in history. Bitcoin soared to a new record, surpassing $75,000.
The market reaction can be interpreted as a kind of confirmation of the authoritarian proposals of the elected president. (And yes, it does seem like classic Wall Street insensitivity when some people tout the benefits of a campaign that threatens violence against political opponents and journalists.)
But traders typically just do what they do: determine the potential profits they can make in the coming days and weeks.
When you step back from the hustle and bustle, many of these same traders will tell you that the long-term prospects for the stock market are uncertain at best.
“People don’t like missing out on profit opportunities, so they rush to buy things they can sell quickly before everything falls apart,” Daniel Alpert, managing partner at Westwood Capital, told me. “There is still significant volatility in this market… And I think we will still see a significant unwinding of these trades as the news starts to emerge.”
Markets tend to favor a stable and largely predictable macroeconomic environment. The more gridlock in Washington, the better, if you ask Wall Street. Because nothing destabilizes a portfolio like a sudden movement (like rising inflation, a spike in unemployment, or a new policy announced in a Truth Social post) that can cause a ripple effect in the market.
Part of the rise, Alpert and others say, is simply because wealth managers aggressively cleared chips from the table in the weeks leading up to the election. Wednesday morning brought an unexpectedly clear result.
“We’re going to have a positive reaction today, no matter who wins,” Art Hogan, chief market strategist at B Riley Wealth Management, told my colleague Matt Egan on Wednesday. “There is clarity… This gives the market a sigh of relief.”
If Trump follows through on his campaign promises, we can expect larger deficits, higher inflation, and worker deportations, which, in addition to being cruel and immoral, will also cause economic growth to plummet.
“This doesn’t bode well for the future,” Hogan says. “But the future is not now.”
In other words, take those profits while you can. Because when the reality of Trump’s economic plans sets in, everything will change again. And his proposed changes appear to put the world’s largest economy into uncharted territory that will almost certainly lead to higher inflation.
Among those proposals are blanket tariffs on imports that would force U.S. companies to pay more for critical supplies and raise costs for consumers. Almost all leading economists oppose tariffs of this size and expect them to cause further inflation.
“My worst-case scenario is that he actually succeeds with his overall tariff policy,” Alpert told me. “If the House of Representatives becomes Republican, the tariff policies that Trump can enact will not be completely unlimited… and to the extent that he does so, he will create the worst of both worlds, with higher domestic prices for goods and some services.” without an overall improvement in employment prospects.”