End-of-the-year rebound has begun! Trump has completely ignited Wall Street sentiment, and various funds will rush to buy US stocks.

Notice, the stock market surge sparked by Trump's win in the presidential election has sent out a buy signal for rule-based investment funds, adding momentum to the stock market rally. On the eve of the election on Tuesday, Wall Street had been preparing for the potential volatility risks that could arise after the election. In contrast, Trump's clear victory propelled the VIX index to its second largest single-day decline since 2021, while the S&P 500 index rose by 2.5%. These actions forced systematic-leaning funds to rebalance by investing in stocks, forming a technically driven feedback loop that added to other forces driving the stock market rally. Goldman Sachs tactical expert Scott Rubner wrote in a report to clients on Wednesday, "The year-end rebound starts today and could be higher than what investors expect." He listed buying behaviors linked to options contracts such as "unwinding election hedges, re-leveraging, buybacks, FOMO, Vanna". Analysis from Nomura Securities International Corporation showed that volatility control funds are expected to purchase $50 billion of U.S. stocks next month, with the total purchases reaching $110 billion by January. The Japanese bank also predicted that so-called risk parity funds would significantly shift towards global stocks. Rubner also believes that both types of investment tools may see significant buying. Risk management funds are typically driven by volatility signals rather than fundamental factors and are highly sensitive to changes in daily price volatility. When the market experiences volatility, they often suppress risk exposure, but as volatility decreases, they take the opposite approach. Wednesday's rally marked this shift, where funds can increase risk after reducing stock exposure as Wall Street prepares for potential continued volatility if there are still uncertainties about the election results. Other technical factors are also at play. Morgan Stanley's Christopher Metli wrote in a report to clients on Wednesday that funds expected to enhance returns for specific companies or indices using derivatives are likely to generate around $15 billion in buying by the close on Wednesday. With many funds focusing on tech stocks, these funds are most likely to boost tech stocks, especially semiconductor companies. Additionally, Metli stated that Wall Street traders may purchase $5 billion worth of stocks on Wednesday to balance their options book. Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, said, "Investors hedged before the election. These hedges will either gradually disappear or be closed out."