Here are the best-performing S&P 500 stocks after the US election results

I S&P 500 hit a record high yesterday (6 November) following the US election result. The index ended up 2.53% to close at 5,929 points. While the index performed well, other American players did even better. Based on the type of stocks that rallied, I feel I can learn something about what could happen from here.

Power to take

The best performing stock yesterday Discover Financial Services. The share price fell by 20%. This is also related Capital Onewhich increased by 15%.

There is currently a $35bn deal on the line, with Capital One looking to take over Discover. This will create the largest credit card issuer in the country by loan amount. However, it is still awaiting government approval. With Trump’s victory yesterday, there is much hope that he may soon give the green light to do this. Trump is considered a businessman and has made it a key policy promise to get the economy back on track.

I think this is a really interesting example of how stocks can move based on something like the outcome of an election. It highlights that politics has an impact on the stock market, including certain situations like this one.

Of course, nothing concrete has been done, so yesterday’s jump in these two stocks is based on speculation. But given that Discover has been so profitable it shows the importance investors place on what has just happened.

The retail investment favorite is back

One of the prominent singers yesterday was Tesla (NASDAQ: TSLA). I am seriously considering buying this stock and really should have bought it earlier this summer when the stock was dipping!

Last year Tesla shares rose 30%, and 15% of this move came yesterday. One of the important things here is that Elon Musk has become a vocal supporter of Trump in his campaign. So I feel like some speculative traders have been using Tesla shares as a way to project the idea that Trump is going to win. Equally, if he had lost I think the stock would have gone down in value.

I don’t invest in stocks for that kind of speculation. But looking ahead, I think Tesla can do well. Since Musk is close to the President, I think he can help influence policy around the push toward electric vehicles. He can also lobby for more government aid, more favorable financing terms, and other factors that should ultimately benefit Tesla.

Tesla will also benefit from some of Trump’s policies, including lower taxes. With some manufacturing plants in the US, it can gain a huge competitive advantage compared to its overseas peers, especially if other companies get price cuts.

As a risk, Tesla stock has a price-to-earnings ratio of 128. This is too high and may indicate that the stock is too large.