Traders call out prices for Weatherford, on the floor of the New York Stock Exchange, Wednesday, Nov. 9, 2016. (Richard Drew/AP)

Wall Street roared to life Wednesday after a tumultuous day of trading in global financial markets amid hopes that President-elect Donald Trump would reinvigorate the American economy by combining big tax cuts with new government investments.

What initially was a panicked global sell-off Tuesday night transformed into a near-record high for Wall Street by the end of trading on Wednesday. The turnaround began as Trump struck a conciliatory tone in his early-morning acceptance speech, calling on voters to “bind the wounds of division.” In addition, the Republican sweep of Congress raised the probability that Trump’s proposals to radically reform the tax code and rebuild the nation’s infrastructure could actually become a reality.

The blue-chip Dow Jones industrial average surged ahead about 250 points, or 1.4 percent, close to an all-time high — despite futures markets overnight signaling a decline of as much as 800 points. The Standard & Poor’s 500-stock index and the tech-heavy Nasdaq each gained about 1 percent.

“The one thing everybody wants is Washington to work and something to get done,” said Joseph LaVorgna, chief U.S. economist at Deustche Bank. “Now you have a situation where you’re going to get arguably a more business-friendly backdrop.”

On the campaign trail, Trump delivered a potent blend of economic populism and business-friendly rhetoric that ultimately propelled him to victory. He has pledged to slash corporate taxes from 35 to 15 percent and streamline and lower individual tax rates. In addition, Trump called for $1 trillion in spending on infrastructure, drawn from both the federal government and the private sector.

In 2016 the world has faced economic uncertainty again and again with Brexit and now a Donald Trump presidential win. Here's why 401ks and IRAs are better left alone. (Jayne Orenstein,Daron Taylor/The Washington Post)

Such moves, he said, would jump-start economic growth in a recovery that has repeatedly proved disappointing. His team has projected that his proposals could generate 25 million jobs over his four years in office and trigger 4 percent annual growth. Currently, the economy is expanding at a rate of 2.9 percent.

“That’s huge,” Trump economic adviser Stephen Moore said of the forecasts. “That’s adding another Texas to the economy after five years.”

Trump’s proposals have been roundly criticized by many economists, including eight Nobel laureates and hundreds of others who voiced their concerns in a letter last week. The nonpartisan Tax Policy Center estimated the tax cuts alone could cost nearly $6 trillion over the next decade, not factoring in whether the economy grows or shrinks as a result. It remains unclear how Trump would offset that loss, and he has pledged to leave entitlement programs such as Social Security and Medicare untouched.

But perhaps more worrisome, economists say, is Trump’s aggressive posture on trade. Trump’s promise to rip up free- trade agreements and slap tariffs on Mexico and China has the potential to set off a global trade war. His hard-line stance on immigration could also limit economic growth at a time when baby boomers are retiring and America’s workforce is shrinking.

“If it were government by grudge,” it’s tough to get economic policymaking done, said Vincent Reinhart, chief economist for Standish Mellon. “Once you raise your voice to get what you want, then do something with what you’ve got.”

Wednesday’s market gyrations underscored just how quickly investor sentiment can shift and hinted at the deeper restructuring of the global economy that appears to be underway. Instead of strengthening the ties that have bound the developed world together since World War II, national leaders are watching them unravel.

“Trade is basically good for everybody, but there are winners and losers,” said James Angel, associate professor of finance at Georgetown’s McDonough School of Business. “The people who perceive themselves as losers have spoken.”

The rally on Wall Street, however, was driven by some of the biggest beneficiaries of globalization. Financial stocks were up 1.5 percent on the prospect that Trump might roll back parts of the sweeping Dodd-Frank Act put in place after the Great Recession. Also scrapped is the threat of a financial transaction tax proposed by Democratic presidential nominee Hillary Clinton.

But the biggest mover of the day was the health-care sector, which jumped 3.26 percent on Wednesday. Trump has said repealing the Affordable Care Act is one of his top priorities, although he has not provided details on what would take its place.

The surge in equities was accompanied by a sell-off in the bond market. Yields on the 10-year Treasury — which moves in the opposite direction of price — jumped to more than 2 percent for the first time since January. The move reflected investors’ expectations that Trump’s proposals would generate growth, resulting in rising inflation and higher interest rates. At the end of the wild day on Wall Street, markets were betting that the Federal Reserve will hike its benchmark rate when it meets in December.

Yet some analysts cautioned that the optimism in the markets could fade just as quickly as it appeared.

“The markets are clearly expecting a more moderate President Trump than candidate Trump,” said Ben Laidler, head of equities research at HSBC. “We fear that this benign reaction is not going to last.”