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Donald Trump's election victory last month ignited a trading frenzy at stock brokerages and Wall Street banks, as expectations of sweeping policy changes exacerbated the rise in US stocks.
Trading volumes in US stocks Shares jumped 38 percent in November compared to the same month in 2023, reaching levels not seen since the meme stock frenzy of early 2021, and this month remains above their average for the year, according to exchange operator Cboe Global Markets.
The jolt of trading activity has swept through brokerages favored by retail clients, such as Interactive Brokers and Robinhood, as well as institutional powerhouses including JPMorgan Chase and Citigroup. This is according to expectations Trump It will take a more business-friendly approach, which led to investors flocking to US stocks after the November 5 election.
Broader trading activity was also boosted by a strong year in US markets, with the Wall Street S&P 500 index up 27 percent year-to-date to reach a series of record highs.
There has been an “incredible level” of investor interest in the markets in recent months, “and that is translating into trading activity,” Rick Wurster, who is set to take over as CEO of brokerage Charles Schwab in January, told the Financial Times. times.
He added: “I don't think turning the calendar to 2025 will change it.”
The increase in activity also benefits Wall Street's largest banks.
JPMorgan Chase's trading revenue in the last three months of 2024, including the weeks leading up to the November election, was on track to rise “slightly better” than 15 percent over the previous year. Services conference.
That number is more than three times the 5 percent increase that analysts expected before Trump's victory, according to data from Bloomberg.
“There will likely be a tangible policy change,” Lake said of the Trump administration's potential impact on markets and the economy, adding that she shares the market's widespread optimism about the president-elect. “There will likely be some kind of pro-growth agenda,” she said.
Citigroup said this week that trading revenue in the fourth quarter is expected to rise as much as 19 percent compared to last year.
Likewise, Robinhood, a brokerage favored by young traders, said this month that stock trading volumes increased 16 percent between October and November, while cryptocurrency trading volumes jumped more than 500 percent. Activity, as measured by average daily revenue trades, rose 17 percent on the same basis, Interactive Brokers said.
Shares of rival Schwab and Interactive Brokers have risen 31 percent and 47 percent in the past three months, respectively, outpacing the Standard & Poor's 500 index's 10 percent rise. Shares of online brokerage Robinhood nearly doubled, boosted by its strong cryptocurrency business.
Steve Quirk, Robinhood's chief brokerage officer, said trading volumes on its platform “exploded” on election night.
“We're starting to see tremendous amounts of volume in the cryptocurrency space,” he told attendees at the company's investor conference last week, adding that shares in companies like Tesla have “just taken off in terms of volume and price.”
“People like to trade when there is volatility, so one could certainly say the new management likes volatility and will increase it,” said Steve Sanders, head of product development at Interactive Brokers.
Patrick Mulley, senior research analyst at Piper Sandler, added that expected interest rate cuts by the Federal Reserve and a “more relaxed” regulatory environment under Trump will lead to “higher trading volumes next year.”
