BUENOS AIRES – Argentina’s markets experienced a significant upswing on Monday, with the peso strengthening and sovereign bonds seeing a notable boost. This came after libertarian President Javier Milei celebrated his party’s sweeping success in the midterm congressional elections, viewing it as a green light to pursue his ambitious free-market reforms.

The Argentine peso, which had been rapidly losing value as investors and locals sought to protect themselves from a potential Milei loss, surged by over 10%, trading above 1,300 per dollar on Monday.

This market response indicated a resurgence of investor confidence in Argentina, aligning with the Trump administration’s supportive stance towards its ideological partner in South America.

“We provided substantial assistance,” U.S. President Donald Trump mentioned to reporters aboard Air Force One on Monday, referring to a promised $40 billion in U.S. aid intended to help Milei avert a currency crisis. “He’s confronting a century of flawed policies, and with U.S. backing, he’s set to overturn them.”

Rarely has a relatively minor Argentine legislative election captured such attention in both Washington and on Wall Street. Earlier this month, Trump heightened the election’s stakes by threatening to withdraw financial support if Milei’s party lost to its left-wing rivals.

Markets rebound

Over the past month, Argentine markets have floundered as the country faced a severe cash crunch. A landslide local election win for the left-leaning populist opposition raised fears that Argentines were losing patience with Milei’s harsh austerity measures.

Alarmed that Argentina could return to the budget-busting populism of its long-dominant Peronist opposition, investors rushed to pull their money out of the country as analysts predicted a tough slog for Milei in the midterms. The Argentine peso plunged to a record low of nearly 1,500 against the dollar.

But in the end, Milei’s La Libertad Avanza party on Sunday triumphed over Argentina’s Peronist coalition, which won just 32% of the national vote in the lower house, compared to Milei’s 41%. Argentina’s dollar-denominated bonds set to expire in 2035 jumped over 10 cents on the news after markets opened.

Concerns build over US rescue of Argentina

The political backlash against Trump’s huge U.S. rescue package for Argentina has been mounting for weeks.

Democrats on Capitol Hill have seized on the assistance to attack Trump, accusing the president of showering money on his political allies at a time when federal workers aren’t getting paid due to the government shutdown.

American ranchers have chafed at Trump’s promises to buy Argentine beef to bring down U.S. prices. Farmers have voiced anger at rival Argentine farmers replacing them as key soybean suppliers to China after Trump’s pledges of financial support allowed Milei to briefly scrap export duties.

Even core Trump supporters have expressed worries over the lifeline, seeing it as at odds with the president’s “America First” doctrine.

Trump and U.S. Treasury Secretary Scott Bessent have brushed off the criticism and insisted that the U.S. had a strategic stake in Argentina’s economic stability.

On Monday, Trump implied that the market rally over Milei’s victory had, at least so far, offered a windfall to American investors and fund managers.

“The bonds have gone up, their whole debt rating has gone up,” Trump said. “That election made a lot of money for the United States.”

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