After tumbling immediately following the U.S. election results, global financial markets shook off their early worries about a Donald Trump presidency and roared higher on Wednesday.

The Dow Jones industrial average finished up 1.4 per cent at 18,589.69, just 0.25 per cent below the all-time high it set in August, after futures trading plunged by as much as 800 points overnight.

The S&P 500 and the Nasdaq composite index both added more than one per cent on Wednesday.

The Toronto Stock Exchange, meanwhile, rose by 103.07 points to finish at 14,759.91.

Bill Morneau declines to comment about falling Dow futures during election night party 0:55

European shares also reversed earlier losses, with the STOXX 50 and the FTSE 100 both adding about one per cent, and Germany's DAX gaining 1.6 per cent.

Markets had priced a win for Democratic candidate Hillary Clinton, who was seen as the status quo candidate. So when she lost, it threw them into turmoil in the immediate aftermath, as there is uncertainty about Trump's policy positions, as well as market skepticism over his views on trade and other issues.

But the gloom didn't last into the trading day Wednesday once investors realized a business-friendly Republican Party will control the House, Senate and White House.

Trump's comments during the campaign raised fears about trade wars, as the president-elect railed against various free trade deals and at times threatened to slap a 45 per cent tariff on Chinese imports and a 35 per cent tariff on some Mexican imports.

While an extreme move is unlikely to have support in Congress, BMO economist Doug Porter noted early Wednesday that the president can impose temporary tariffs of up to 15 per cent to address large current account deficits without congressional approval, and those two countries account for over half of the U.S. trade deficit.

ANALYSIS | How Trump defied pundits and pollsters to win the White House

"Retaliatory action from China and Mexico could impact a fifth of U.S. exports," he added.

Markets were in a panic late Tuesday evening until Trump gave a victory speech in which he said he would seek common ground and reject hostility, seeking to work with other nations and to bring the country together.

Kathleen Brooks, research director at Forex.com, said that during his victory speech Trump "sounded more presidential than he has done at any stage during the election campaign."

Brooks said the speech helped soothe stressed markets.

A trader reacts as he watches Donald Trump's victory speech at the Frankfurt Stock Exchange on Nov. 9 in Germany. Stock markets around the world reacted with volatility to the surprise win for Trump. (Thomas Lohnes/Getty Images)

The U.S. dollar lost ground as investors fled to other safe havens, including the Swiss franc. The Canadian dollar, meanwhile, was down 0.41 of a cent to 74.75 cents US. Gold slipped $1 to $1,273.50 US an ounce, but trading volume was three times the level of a normal trading day.

The Mexican peso tumbled to an all-time low of 20.77 pesos to the U.S. dollar before recovering somewhat.

Economist Craig Alexander with the Conference Board of Canada says seesawing markets are to be expected after such a stunning event.

Jacqueline Hansen recaps the trading action following Donald Trump's election win 2:08

"Markets are waiting for the dust to settle," he said in an interview. "We don't know what we're going to get from Trump so let's wait and see."

He said investors know less about Trump's economic policies than any other successful candidate in history, so flat markets might be the logical result in the short run.

"He's going to do whatever he thinks is in America's interest," he said, "but some of the things he's said won't even get through a Republican-controlled Congress."

Prof. Jeffrey Frankel of the Harvard Kennedy School said he, too, doubts Trump's anti-trade deal bluster will add to much.

"My best guess is that he won't in fact tear up NAFTA or raise tariffs as widely as he has said," Frankel said in an interview. "I hope this is not just wishful thinking on my part [but] even he has to confront at some point how drastic would be the consequences or this sort of destruction of the global order."