On Monday, the stock market saw a broad rally, with the Dow Jones Industrial Average, S&P 500, and Russell 2000 all hitting new record highs. The surge was largely attributed to optimism surrounding President-elect Donald Trump’s nomination of Scott Bessent, the founder of Key Square Group, as his Treasury Secretary. Investors believe that Bessent, a hedge fund manager, will help guide the economy without triggering inflation, thus providing a boost to the equity markets.
Key Market Moves
- Dow Jones Industrial Average rose by 440.06 points, or 0.99%, to a new record closing at 44,736.57.
- The S&P 500 gained 0.3%, closing at 5,987.37.
- The Russell 2000, which focuses on small-cap stocks, jumped 1.47%, surpassing its previous all-time high set in 2021.
- The Nasdaq Composite ticked up 0.27%, ending the day at 19,054.84.
The rally came as investors reacted positively to the news of Bessent’s nomination. They view him as a figure who could provide stability to the economy and ease some of the concerns about the protectionist trade policies under Trump. Bessent has already indicated a more gradual approach to tariffs, which has helped assuage fears of inflation.
Treasury Yields and the U.S. Dollar
Following the announcement of Bessent’s appointment, both Treasury yields and the U.S. dollar index pulled back, suggesting that the market expects Bessent to implement policies that may avoid inflationary pressures.
Technology Stocks
While the broader market rallied, the performance of big tech stocks was more mixed. Amazon and Alphabet saw gains, but Nvidia and Netflix ended the day lower.
Outlook for the Rest of the Week
With the Thanksgiving holiday approaching, trading volume is expected to be light for the rest of the week. However, attention will turn to key economic data releases, including the October Personal Consumption Expenditures (PCE) price index, which is the Federal Reserve’s preferred inflation measure. The Fed minutes from its most recent policy meeting will also be scrutinized for any insights into future rate hikes.
Year-End Market Expectations
Looking ahead, Bank of America analysts expect a slight dip in stocks after Thanksgiving before a strong rally into the end of the year. Historically, the period between Thanksgiving and the year-end has seen positive returns for the S&P 500, with an average gain of nearly 1.5%.
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