U.S. Stocks Celebrate Record Gains Post-Trump Victory

November 8, 2024
In a week marked by monumental market shifts, U.S. stocks capped their best week of the year on Friday, with significant milestones that included the S&P 500 (^GSPC) briefly hitting the coveted 6,000 mark. This surge in stock performance follows Donald Trump’s victory in the presidential election and the Federal Reserve’s decision to implement a rate cut.

Record Levels for Major Indices

The broad-based S&P 500 climbed 0.4% to log a new record, while the technology-heavy Nasdaq Composite (^IXIC) saw a flat close. The Dow Jones Industrial Average (^DJI) surged 0.6%, reaching an unprecedented 44,000 during the session. These gains reflect a market rally fueled by optimism surrounding potential economic enhancements tied to Trump’s return to office.

Investor sentiment exhibited volatility as the "Trump trade" unfolded Friday, leading to fluctuations in the U.S. dollar (DX=F) and Treasury yields, which retraced some gains made immediately following the election results.

Sectors and Stocks Making Waves

Key sectors saw impressive gains, particularly utilities, real estate, and consumer discretionary. Notable stocks, such as Tesla (TSLA), experienced significant price action. Tesla’s shares rose over 9% on Friday, contributing to a remarkable weekly increase of approximately 30%, pushing its market capitalization to above $1 trillion.

Another highlight was Nvidia (NVDA), which officially joined the Dow on Friday, replacing Intel (INTC). This move underscores the growing influence of AI-driven companies on traditional indices.

In a noteworthy development, stocks of the Trump Media & Technology Group (DJT) soared over 15% following Trump’s announcement that he would maintain his ownership stake in the company, which operates the social media platform, Truth Social.

Global Market Reactions

Back on the international front, Chinese stocks declined amid skepticism over the effectiveness of China’s $1.4 trillion fiscal stimulus plan aimed at refinancing local government debt. This lackluster response placed additional pressure on oil prices and raised concerns about the stability of the Chinese economy, dragging down related stocks in the U.S. market.

Chinese Market Pressure

E-commerce behemoth Alibaba (BABA) saw a nearly 6% drop, reflecting broader trends affecting Chinese technology companies after Trump’s election win stirred worries over potential tariffs and other trade restrictions.

Upcoming Economic Indicators

As markets look to the week ahead, investors will be eyeing forthcoming economic data releases for insights into the U.S. economic landscape. A key indicator will be the Consumer Price Index (CPI), set to be released on Wednesday, with economists predicting a 2.6% rise on an annualized basis for September, and a month-over-month increase of 0.2%.

Additionally, the upcoming earnings reports from notable companies—including Live Nation (LYV), Spotify (SPOT), Home Depot (HD), and Hertz (HTZ)—will provide further context to market performance amidst these turbulent economic conditions.

Holiday Observations

Market activity will proceed as usual on Monday, November 11, with the stock market open but the bond markets closed in observance of Veterans Day.

Conclusion

The trading week has set a vibrant tone on Wall Street, with fresh records achieved and investor enthusiasm prominently displayed. The longer-term impact of Trump’s policies on the economy remains to be seen, as analysts and market participants will closely monitor developments not only in the U.S but globally as well. As the market braces for significant economic data and quarterly earnings, the key question will be whether this momentum can be sustained amidst shifting political and economic landscapes.