U.S. stocks extended their rally on Thursday, hitting record highs as investors digested the implications of Donald Trump’s presidential victory. The S&P 500 rose 0.7%, while the Nasdaq Composite gained 1.4%, and the Dow Jones Industrial Average edged up 0.1%. Each of these major indices reached new intraday peaks during the session, riding the momentum from Wednesday’s surge, which included a 1,500-point leap for the Dow and a 2.53% gain for the S&P 500 — marking the strongest post-election day in its history.
Bond Market Volatility: The bond market also saw significant movement, with Treasury yields pulling back after a sharp rise in the previous session. This fluctuation set the stage for the Federal Reserve’s interest rate announcement and Chair Jerome Powell’s press conference later in the day. Investors are nearly certain of a quarter-point rate cut, according to CME Group’s Fed Watch tool, though future cuts remain uncertain.
Market Insights: Paul Eitelman, chief investment strategist for North America at Russell Investments, noted that the recent election and market volatility were unlikely to shift the Fed’s immediate policy trajectory. “Where the election could start to factor in…is in 2025, when we get a clearer picture of trade policy and tax reform,” he stated.
Tech and Financial Sector Movements: The rally was supported by gains in Big Tech, with Apple and Nvidia advancing 2% and 1.7%, respectively, and Meta Platforms climbing more than 3%. Conversely, financial stocks that surged on Wednesday cooled down, with JPMorgan Chase dropping nearly 4% and American Express dipping over 2%, applying some pressure on the Dow.
Outlook and Concerns: Wall Street expects Trump’s pro-business agenda, including potential tax cuts, to continue to bolster risk assets like stocks. However, the administration’s policies on government deficits and potential new tariffs have raised questions about possible inflation pressures. Investors will be watching closely as the Fed outlines its approach amid these shifting economic conditions.
