Wall Street's most famous floor trader recounts election euphoria at the NYSE and explains how to trade an incredibly bullish fourth quarter
Michael M. Santiago/Getty Images
- Markets surged after Trump's election win, with the S&P 500 and Dow rising sharply.
- Traders were excited by the end of election uncertainty, fueling a relief rally.
- Upcoming Fed rate cut and holiday season may sustain market momentum, Tuchman predicts.
For Peter Tuchman, a senior floor trader who's spent over four decades at the New York Stock Exchange, the excitement the day after the elections was euphoric.
"Look, the bottom line is, on the floor, a majority of them are big Trumpers," said Tuchman, whose expressive appearances in wire photos have made him a trading-floor icon. "They were super excited about the results for the market," he added.
Markets reacted strongly to former President Donald Trump's victory over Vice President Kamala Harris in Tuesday's election. The S&P 500 hit all-time highs and saw its largest post-election-day gainand the Dow Jones by over 3.5%.
Tuchman told Business Insider that regardless of how he felt about the results, by the time the opening bell went off, the excitement and energy from the floor brought back a bustling NYSE as brokers, the press, and photographers filled the room again.
"It was old school Wall Street," Tuchman said. "Brokers were really running around. When you've got markets that are gapping up in a big way, where stocks closed at 50 yesterday and are opening at 60, you're going to see a lot of people trying to get an idea of what the pricing is for the market."
Markets can handle anything except unknowns and anticipation, he said. The election has been festering for over a year. So another part of it was a relief rally as markets reacted to the big unknown being over, allowing everyone to go on with their lives — at least for now.
Volatile markets excite traders because they create opportunities to exploit the moves. However, the response from major indexes exceeded his expectations. Even after stocks closed at record highs on Tuesday, they continued to rip upward on Wednesday. At first, Tuchman didn't expect the rally to last more than an hour. He then realized that the strong trend could be held up by more than just election results. On Thursday, the Fed is likely to bring in another rate cut, which could keep the momentum going for longer, he said.
"We're going to carry into the Fed meeting, which is a big deal. When that's done, we're going to carry into Thanksgiving. When that's done, we're going to carry into Santa Claus at the end of the year," Tuchman said. "So I would say the next seven weeks, for one reason or another, is going to be an incredibly bullish, solid, exciting time."e
To investors, he says, there's no bad time to get into the market. Yesterday's highs could be today's lows. But those with a lot of profits in some stocks may want to shave a little off the top, he said.
As for traders, take advantage of this time while wonderful stocks are on fire, he said. There is enough trend and volatility to create opportunities, with some of those stocks having extraordinarily expensive valuations like Tesla, AMD, Nvidia, and Palantir, he noted.
However, there are a few things to keep in mind. For one, volatility tends to be a function of one or two components; this time, it's a function of multiple components that include elections, the Fed, inflation, unemployment, the tech sector, and tariffs, among other things. Traders will need to remain aware of all of them.
Therefore, as always, following a strict set of rules is key because, on one end, you could make a lot of money in this market and then blow up your trading account in five minutes, he noted.
"You've got markets that are going to trade up, up, up, up, and then out of nowhere, they're going to sell off when somebody decides they want out," Tuchman said. "So the market is not very forgiving."
That said, brace for a potential pullback that could be around the corner.
"There is a little historic bit of data that says eight of the last eight election cycles, the week after the election, the market sold off and pulled back a little bit until November 21, and then the market rallied for the next six weeks into New Year's in a really strong fashion," Tuchman said.
He added that there is enough historical probability to assume it can happen again. However, expect a slowdown due to some profit-taking over the next week or two before the second leg of the rally continues after Black Friday into the new year, he said.