A rendering of Louis Vuitton's future flagship at Place Vendôme.

The election of President-elect Donald Trump sent the international fashion world into a tailspin and caused global markets to initially dive, although some recovered by the close of their trading day.

“RIP USA,” Riccardo Tisci wrote on Instagram beneath a black screen, summing up a mournful mood in Europe as the continent absorbed news of Trump’s win.

The upset sent European stock markets tumbling in opening trading, though Paris, London and Frankfurt ended the day in positive territory.

Meanwhile, analysts warned of negative consequences for luxury and touted positive ones for accessible fashion.

“Volatility will almost certainly increase; the fundamental reality is that we don’t know what kind of U.S. we are now faced with given the lack of policy detail through the campaign,” RBC Capital Markets said in a report on Wednesday.

“Potential outcomes range from a pro-growth conservatism, which could ultimately be positive for markets, to a more nationalist protectionist outlook, which largely would not be. Only time will tell. We expect valuation discrepancies will open up in the meantime,” the report added.

At the end of trading, Germany’s DAX gained 1.6 percent to 10,646.01; France’s CAC 40 1.5 percent to 4,543.48, and London’s FTSE index 1 percent to 4,543.48. Milan’s FTSE MIB index eased 0.1 percent to 16,799.85.

The euro ended the day at $1.10, while the pound fetched $1.24 and the Swiss franc equaled $1.03.

In the longer term, the Trump victory is expected to boost the U.S. dollar’s strength against the British pound and the euro, which would benefit consumer staples the most and luxury the least, with retail somewhere in between, according to RBC.

It forecast that staple names with strong balance sheets, such as high-street chains Inditex and H&M, will outperform while stocks with heavy exposure to sourcing in U.S. dollars will be vulnerable to a sell-off. The latter category includes U.K. retailers Sports Direct, Next, Debenhams and Marks & Spencer.

“Luxury goods as a concept is the notion of ‘feel good purchases’ and the Trump victory and implied risk-off equity markets increases uncertainty and lowers confidence in the global/U.S. economic outlook. This is therefore negative for European luxury stocks at least in the short term,” RBC said.

“Longer term, our strategists believe the Trump victory will be USD positive — which is helpful for the European luxury sector given positive revenue translation — according to our estimates a 10 percent USD appreciation would drive nearly 20 percent EBIT upgrades on average,” it added.

A stronger dollar would continue to restrict tourist spending in places such as California, New York and Florida, likely benefiting other destinations such as the U.K., it concluded.

Luca Solca, managing director at Exane BNP Paribas, called Trump’s victory a “clear negative for luxury goods stocks.”

“This scenario would likely see selling pressure on equities,” he wrote in a recent report. “This could dent global consumer confidence but especially in the USA, where households are heavily exposed to the stock market.”

Given Trump’s protectionist leanings, he said such policies would hurt emerging markets, dampening luxury demand.

Solca also forecast downward pressure on the U.S. dollar, and higher interest rates, which would be a “double whammy” for luxury goods players.

“The stocks most negatively impacted are likely those highly exposed to USD, namely Luxottica, Brunello Cucinelli, Ferragamo and Burberry,” he said. “Stocks with high exposure to JPY, such as Hermès and Moncler, should be safe havens.”

But Solca spied a silver lining, too.

“You have a Republican president and both houses of Congress with a Republican majority,” he told WWD. “This means that things can be done, and that the president has a chance to implement new policy. This may involve spending money on infrastructure to reinforce the economic recovery in the USA. If this happens, and the protectionist agenda is forgotten, then this could be very good news for the stock markets and good news for luxury.”

Meanwhile, designers and industry figures expressed mainly surprise and distress at the election upset, as Democrat Hillary Clinton was seen as the favorite in pre-voting polls.

Tsum’s Riccardo Tortato, men’s fashion director and fashion director of e-commerce, withheld judgment on the election outcome. “We all should wait to see what the new president will do and then judge,” he said. “Regarding relations with Russia, I think that an American administration that is open to a dialogue and understanding with Moscow can be only welcome from the whole world. Russian people love America and for them it was always strange to see during this election this continuous attack on their country. This morning, everybody saw positively a new president that at least is interested in opening a new dialogue with the Kremlin.”

Mercury and Tsum enjoy “great relations” with American brands such as Ralph Lauren and “it’s too early to see possible changes related to business,” he noted.

“Ominous,” said Rick Owens, a California native now based in Paris. “It seemed like an alarm had been sounded at the beginning of this campaign, but I felt my vote would be a symbolic gesture because I couldn’t really see it going this far. Now it feels like a personal threat.

“Have I misjudged the needs and aspirations of a broader community that I am still a part of?” he mused. “I’ve been thinking about evolution a lot and how to prepare for inevitable transitions gracefully. I thought this mood might be a general pessimism on my part. But maybe it’s not.”

“Trump president of the United States of America. My thoughts go right away to my American friends who must be so sad and worried. Who wouldn’t be? ” Pierre Bergé tweeted.

“It is always dangerous to be too sure,” said Karl Lagerfeld, who declined comment on the election result as he is German, not American.

“My candidate would have been Michelle Obama,” he said.

Asked about the impact on the fashion industry, he replied: “Not sure it will be affected. Look at [French President] François Hollande. He said he would vote for Hillary. This is not our business.”

Hollande, who had criticized Trump over the last few months, said on Wednesday that his win opens a “period of uncertainty” that Hollande intends to address “with lucidity and clarity.”

After congratulating Trump “as it is natural between two heads of democratic states,” the embattled Socialist leader stressed that, “what is at stake is peace, the fight against terrorism, the situation in the Middle East, economic relations and the preservation of the planet.”

“On all these issues, I will engage without any delay a talk with the new U.S. administration,” he said, noting that “the United States are a very important partner for France.”

“France will also continue transatlantic cooperation, with no compromise and independently,” he added.

French designer Simon Porte Jacquemus looked ahead to the French elections.

“I hope that we’ll focus our energy not only to post images on our social media but that we’ll talk about it around us, so that it doesn’t happen here in May 2017,” he  told WWD. “We have until December to register to vote. Let’s act.”

Paris Mayor Anne Hidalgo reacted on her Facebook page on Wednesday morning.

“Many of us in Paris followed the U.S. election results last night,” she wrote. “This morning, the shock is brutal. Donald Trump is about to become the 45th president of the United States of America. This is very bad news for social harmony and for the great challenge of the 21st century that the fight against climate change represents. The result marks a deep divide in American society….We must question ourselves. It is not unique to the United States: Europe and France are also being exposed. We must improve our education systems, share progress, give our children hope to thrive and live in better conditions than us.

“My thoughts go to Hillary Clinton, to all my Democrat friends who are mayors of major U.S. cities,” she said. “I think of Bill de Blasio, mayor of New York; Muriel Bowser, mayor of the District of Columbia; Rahm Emanuel, mayor of Chicago; Eric Garcetti, mayor of Los Angeles, and Ed Lee, mayor of San Francisco. I want to tell them that hope is at their home, is in their actions in favor of more inclusive cities, more innovative, more resilient and environmentally friendly. They have my full support and that of Paris.”

François-Marie Grau, managing director of the French Women’s Ready-to-Wear Federation, cited two major concerns.

“The ongoing trade negotiations such as Trans-Pacific Partnership and transatlantic treaty are off to a bad start. Donald Trump also wants to reconsider existing agreements such as North American Free Trade Agreement. It’s very bad news for the European fashion industry that’s exporting to the U.S.”

Grau noted the U.S. was the sixth largest market for the French clothing industry in 2015.

“Exports of French clothing to the U.S. were up 17 percent in 2015, compared to the previous year. Another negative impact could be the variation of the exchange rate between the euro and the dollar, with a very strong euro making European goods less competitive,” he added.

In Italy, executives had measured comments.

“I think Hillary Clinton lost because she was not innovative enough, she did not speak to the younger generation, focusing on their problems and ways to solve those problems. I was surprised, but not too much,” said Renzo Rosso, founder of OTB, parent of Marni, Maison Margiela and other brands. “I hope the strong statements made by Donald Trump during his campaign will be softened during his mandate, as it often happens. In terms of business, we must be positive and hope that the country will fare well, independently of whoever is the president, creating new jobs and new wealth.”

Carlo Capasa, president of the Camera Nazionale della Moda, noted that America represents Italy’s number-two market for fashion exports.

“It’s a country we feel very close to, with which we have consolidated relations of trade and collaboration. We strongly hope that the president chosen by the Americans for the next four years will maintain intact the rapport of openness and exchange.”

“It was surely a surprise, an unexpected choice. In any case, it’s a choice that must be respected since it’s the preference expressed by the American people,” said Massimo Ferretti, executive chairman of Aeffe. “The wish is for the excesses of the electoral campaign to be toned down following the realization that the reality is complex both from an economic and cultural point of view. I don’t expect relevant impacts for the luxury sector.”

“The implications of Donald Trump’s victory can be evaluated only in the medium-range, when it will be clearer which of the promises made in his campaign he will be able to implement and when,” concurred Claudio Marenzi, president of industry association Sistema Moda Italia. “Today, the U.S., despite the presence of already strong import duties, represents one of the main areas of export for our products. We expect that the announced protectionist policy in the future will not morph into an isolationist commercial policy; this could generate an additional instability in commercial trade in the world, also due to possible commercial and currency wars.”

Meanwhile, Trump’s victory is putting Mexico and other Latin American countries on tenterhooks as they await on his pledges to reboot the North American Free Trade Agreement while a slumping peso threatens to scupper economic growth, spoiling a fashion consumption boom.

“There are many incognitos and we don’t know what will happen but if he renegotiates NAFTA that would have a terrible impact on Mexico’s economy and affect our exports,” said Eric Levy, commercial director of clothing manufacturer Industrias Cavalier, which makes tailored suits for Tommy Hilfiger. “I don’t think large U.S. companies making footwear and denim here will let this happen.”

Already, Mexican clothiers and retailers are suffering as a 40 percent decline in the peso — which rose well above a $20 threshold on Wednesday — that began in 2014 has sharply boosted raw-material and apparel import costs.

Companies have been largely unable to pass the higher costs to consumers. Now, with a bleaker economic outlook and rising inflation — which the Central Bank said Wednesday outstripped targets — that could become even harder, executives said.

Levy echoed other views that Trump’s thorny political discourse may not become reality.

“Some of the things he has said are not realistic,” Levy noted, pointing to the billionaire’s threat that he will deport millions of illegal Mexican residents whom he has branded as rapists and criminals.

“If we get a very tough anti-immigration law [from the U.S.], that would have a negative impact on our economy, but that would go against many large U.S. companies’ interests to employ migrants and even Trump’s,” Levy said. “After all, he was in favor of using illegal workers for his construction business for 30 years before he changed his stance.”

Nevertheless, a potentially sudden return of millions of Mexicans to their home country could trigger unemployment and that, combined with the weak peso and inflation, would hit a consumption and dent a five-year apparel sales boom that has encouraged many U.S. and foreign fashion labels to expand in Latin America’s second-largest economy.

“If the peso continues to depreciate that will stoke inflation and cause consumption problems in the long-term,” said textiles industry consultant Miguel Angel Andreu, adding that top trade lobby Canaive is still weighing the impact of Trump’s unexpected victory.

Observers said the president-elect’s threat to build a wall to shield the U.S. from Mexican immigrants is less alarming than his intention to modify NAFTA. The U.S. and Mexico trade roughly $2 billion in textiles and apparel annually but much of that already moves through specific border posts.

“Trade is already moving through designated posts that are unlikely to change,” Levy said.

Carlos Eduardo Botero, ceo of Colombian fashion trade institute Inexmoda, said Trump’s proposal to modify NAFTA would negatively impact the region, which could see Mexican maquilas slash demand for South American clothing and other feedstocks. A weakening Mexican economy could also hurt Brazil and Peru which have been ramping up fabric and finished garment exports to their northern neighbor.

Hurt by a possible exports decline to the U.S., Mexico could move to deepen its integration with Colombia, Peru and Chile to build a stronger trading block under the existing, yet slow-moving Pacific Alliance, he said.

Inexmoda’s strategic transformation director Luz Adriana Naranjo said Mexico could have a hard time slashing its NAFTA umbilical cord though some firms are already working to do this.

“We were in Mexico in February and visited several factories in Mexico City, Puebla and Merida and we felt Mexicans are in a very comfy zone with the U.S. because of their [stable political] status and proximity with the U.S,” Naranjo said. But “they realize that could change any moment and some companies are already investing to improve technology and innovation.”

One region that could benefit from a NAFTA re-write is Central America, said Lucia Palacios, executive director of Guatemalan apparel trade lobby Vestex.

“If NAFTA changes, CAFTA-DR could benefit,” as the U.S. seeks to import apparel from other Latin American countries, Palacios said. “We are having a meeting with PVH in New York today and they told us the CAFTA region is going to have bigger opportunities.”

CAFTA-DR links the U.S., Dominican Republic and six Central American countries into a free-trade zone.

Palacio said Trump’s pledge to eliminate the Trans-Pacific Trade Partnership could also benefit Central America, which was nervous about losing sourcing market share to an already empowered Vietnam.

Asian indexes tumbled Wednesday on news that Trump was heading to victory. As the first markets to trade on the results, the Japanese Nikkei closed down 5.4 percent as its currency, the yen, and other safe haven assets like gold surged. The ASX 200 also fell, ending the day down by 1.9 percent.

The Hang Seng Index lost 2.7 percent, South Korea’s Kospi fell 2.8 percent, Straits Times Index tumbled 2.3 percent.

In China, Shanghai Composite was down 0.4 percent while the Shenzhen Composite lost 0.2 percent.