the upset win by republican presidential nominee donald trump spurred a sharp decline in u.s. stock futures and a broad flight to safety around the globe, underscoring the trepidation among investors about the new york developer<u+2019>s presidency. s&p 500 futures slumped as much as 5% following news that mr. trump pulled ahead of democratic nominee hillary clinton. cme group doesn<u+2019>t allow its stock-market futures contracts to drop more than 5%. japan<u+2019>s nikkei stock index was down about 5%, crude oil slumped more than 3% and the dollar fell 3.6% against the japanese yen, while the prices of u.s. treasurys and other rich-country government bonds rose, sending yields down. the dollar was up as much as 11% against the mexican peso. gold prices, a haven, rose almost 5%. tuesday evening<u+2019>s reversal is the latest sign of markets<u+2019> fear of a trump presidency. during his campaign, he has advocated sharply controlling immigration and raising tariffs on trade, decisions that many economists contend could pressure growth at trading partners such as mexico and potentially reduce already sluggish global growth. the pullback in u.s. stock prices, if it holds when the u.s. market opens wednesday morning, stands to reverse a rally monday that marked the dow industrials<u+2019> largest daily gain since the spring. that rise, which came after the federal bureau of investigation cleared mrs. clinton in a probe of her handling of classified emails, was widely taken as a sign that investors were banking on a clinton victory tuesday<u+2014>an outcome that suddenly came into doubt with poll results released just after 9 p.m. eastern time. many investors also are uneasy about the lack of specifics underlying some trump proposals and the uncertainty that they contend would arise as a result of a presidency whose policies aren<u+2019>t fully spelled out. in addition, the surprise win by mr. trump may derail the fed<u+2019>s rate-increase plan in december, traders said. many investors view mrs. clinton as the <u+201c>status quo<u+201d> presidential candidate, whose policies are unlikely to inject much volatility into markets. before tuesday night, many investors had expected mrs. clinton to prevail, which would clear a hurdle for the fed to raise rates next month amid signs of an uptick in inflation and a robust labor market. meanwhile, analysts say uncertainty surrounding mr. trump<u+2019>s policy proposals could hurt the dollar and other risk-sensitive currencies such as the peso. similarly, investors believe a win by mr. trump would boost prices for gold and the yen. the mexican peso, a market proxy for mr. trump<u+2019>s odds in this election, sank, while havens like the yen, u.s. government bonds and gold extended rallies. by wednesday morning, the indexes were off their lows. the s&p 500 futures were down 38 points, or 1.8%, while the dow jones industrial average futures were off 312 points, or 1.7%. short-term treasury yields, highly sensitive to the fed<u+2019>s rate policy outlook, fell tuesday night. the two-year yield was down 0.11 percentage point at 0.754%. fed fund futures, a popular derivative market for hedge funds and money managers to bet on u.s. interest-rate policy, showed 81% odds that the fed would raise rates by its december meeting, according to data from cme group. the odds were 72% on monday and 67% on friday. the yield on the benchmark 10-year treasury note earlier rose above 1.89% but fell to 1.792% tuesday night, according to tradeweb. yields fall as bond prices rise. the yield had settled at 1.867% during regular trading hours, the highest close level since may. tom di galoma, managing director of government trading and strategy at broker seaport global securities, said he sees <u+201c>heavy flow<u+201d> into treasury bonds and that the 10-year yield, which moves opposite to price, could sink further on the trump win. the move in the peso was particularly noteworthy on the trading floor of mizuho financial group inc. <u+2019>s americas unit in midtown manhattan tuesday night. <u+201c>that is a very big move, especially over 3.5 hours,<u+201d> said dan riveira, managing director in foreign-exchange trading at mizuho financial. <u+201c>the peso is being used as a barometer for the election.<u+201d> as the currency<u+2019>s value rapidly flashed in magenta on his screen, mr. riveira said this is the biggest move in the mexican peso he can remember. the canadian dollar could face pressure under a donald trump presidency because of his pledge to renegotiate or scrap the north american free trade agreement. the canadian dollar most recently changed hands at <u+00a5>79.30, up from a low of <u+00a5>78.30 as some early results were favorable for hillary clinton. <u+201c>that<u+2019>s a significant move,<u+201d> mr. pacifico said. the canadian dollar has since pared some of those gains, recently trading at <u+00a5>79.00, as investors continued to digest polling results. in recent days, risky assets such as stocks have risen as hillary clinton pulled ahead in polls and sold off as the race tightened. on monday, the s&p 500 snapped its longest losing streak in nearly 36 years with a 2.2% gain, its biggest jump since march. the s&p gained 0.4% on tuesday. many investors said they were cautious heading into tuesday evening, with some citing the selloff in the days immediately after the u.k.<u+2019>s surprise vote to exit the european union.corrie driebusch and akane otani write to ira iosebashvili at ira.iosebashvili@wsj.com , min zeng at min.zeng@wsj.com and chelsey dulaney at chelsey.dulaney@wsj.com
stock futures plunge as donald trump posts surprising win - wsj
min zeng chelsey dulaney