The Dow Jones Industrial Average closed up more than 1 percent Thursday at an all-time high of 18,807.88, as investors bet that the Donald Trump presidency will mean less regulation and more potential stimulus spending.
Specific policies remain to be seen, but the president-elect pledged during the campaign to dismantle regulations, especially the Dodd-Frank financial law, which is now boosting financial stocks. Pharmaceutical stocks posted more gains Thursday, on the anticipation that the Trump administration is much less likely to scrutinize the drug industry than his rival Hillary Clinton.
Trump heavily emphasized more infrastructure spending, pledging to offer tax credits to encourage private financing for investment. With an all-Republican Congress, political gridlock is also less likely, and the anticipation of stimulus pushed manufacturing and defense stocks up.
On the other hand, the prospect of more government spending spurred a selloff in the bond markets. The yield on 10-year Treasury bonds posted its largest one-day gain in three years.
The stock market's gains in the industries that stand to benefit were partially offset in other industries, like hospitals. Trump's promises to dismantle the Obama administration's Affordable Care Act would hurt hospital bottom lines.
The technology-focused Nasdaq fell 0.81 percent, to 5,208, on the day. The tech sector declined because those companies rely on immigrant talent, which those companies anticipate will be harder to attract during the Trump presidency.