U.S. stock ETFs attracted as much as $18 billion on the second day of the election, and the "Trump trade" sparked a buying frenzy

After Donald Trump won the US presidential election, traders rushed to buy risk assets ETF, while being indifferent to the upward prospects of Interest Rate, which threatens some of these strategies. On Wednesday, exchange-traded funds (ETFs) investing in US stocks recorded a capital inflow of approximately $18 billion. Data shows that this is nearly 16 times the average daily inflow in 2024. The capital flow mainly reflects the 'Trump trade', which is a bet that the elected president will relax regulatory positions on industries such as banks and cryptocurrencies, and support companies that operate mostly within the US. iShares Russell 2000 ETF (code: IWM), which tracks small-cap stocks, recorded a net capital inflow of $3.9 billion on Wednesday, the largest single-day inflow in over 17 years. The SPDR S&P Regional Banking ETF (KRE) saw a record daily capital inflow, while a fund under Dow Jones attracted $1.6 billion in capital inflow, the highest since 2016.