Donald Trump’s victory in the US Presidential election could cause volatility in US and global markets, according to Financial Planners and investment professionals.

Donald Trump claimed victory in the US election after winning three key battleground states, with Republicans also projected to take control back in the Senate.

His victory was assured this morning as he passed the 270 threshold for electoral college votes making him almost certain to be declared the next US President.

Lindsay James, investment strategist at Quilter Investors, said: "Trump’s victory marks the start of a new volatile era for the US economy and global markets.

She said: “Volatility is likely to be the defining feature of this presidency. With the future of Ukraine now in the balance, and geopolitical risks seemingly increasing every day, investors will be best placed to try to block out the noise, remain invested and base their decisions on the fundamentals of corporate America, instead of the measures enacted out of the White House.”

Justin Onuekwusi, CIO at St James’s Place, said it was important for advisers and clients to avoid a knee jerk or emotional response to the election result.

He said: “Elections, particularly ones as contentious as this, have a way of stirring up short-term market volatility. However, history has shown it is unwise to make significant adjustments based on political events. Market volatility is often based on speculation and not any change to fundamentals.

“While elections may create temporary volatility, we believe remaining disciplined and building a diversified portfolio is the most effective means of delivering long-term value. It is important to remember the main risk from market events is the poor decisions we can make when they occur, rather than the ramifications of the events themselves.”

Isabel Albarran, investment officer at Close Brothers Asset Management, said that Trump’s victory could reignite inflation fears for the US.

She said: “With Trump's victory now certain, bond yields have risen, in tandem with the dollar, while stocks have also responded positively in the US. With markets moving in anticipation of a Trump victory, we think the market reaction will be more benign than what we would have seen in the event of a Harris victory.

“Over the long term, if Trump delivers on his pre-election rhetoric, we expect his term to be more inflationary than a Harris administration, with tariff plans, tighter immigration controls and tax cuts all potential sources of inflationary pressure.”

Daniele Antonucci, chief investment officer at Quintet Private Bank, parent of Brown Shipley, believes there could be some volatility in US markets in the coming weeks.

He said: "We could see some volatility. However, it’s also possible that clarity on the US elections reduces uncertainty for some time.

"It’s worth noting that between 1936-2023, the S&P 500 delivered an average performance of 15-16% in periods when the US had a split Congress, compared to 12% when there was a united Government. Perhaps this is because of the volatility created by a unified government being able to deliver more significant policy changes.

"Obviously, we’d need to see the final results. Based on US laws, the next important date is 11 December, when all vote reporting, counting (and recounting) stops. Six days later, all 538 members of the Electoral College will meet, with at least 270 votes needed to elect the next US President.

"The result of the election is then sent to the new US Congress, which will convene for the first time on 3 January 2025 and officially validate the Electoral College on 6 January. Finally, on 20 January, the 47th US Presidential inauguration starts. 

"As we write, financial markets continue to react to the news. Asian stocks are softening, while the S&P 500 futures gained and are now close to their all-time high. We have a slight tactical equity overweight, which we combine with a preference for short-dated government bonds and high-quality corporate bonds, while we’re typically underweight risky bonds. 

"We think a Trump lead could signal gains in oil and gas, financial and telecom stocks, as deregulation would benefit these sectors."