Market Optimism Continues to Soar
Following a remarkable post-election rally, the stock market maintained its momentum on Thursday, with indices edging upwards. The focus now shifts to the Federal Reserve, which is anticipated to announce a 25-basis-point rate cut. This move would extend the central bank’s easing cycle, initiated with a 50-basis-point cut in September.
Jobless Claims See Modest Rise
The latest data reveals a slight increase in weekly jobless claims, reaching 221,000 – a gain of 3,000 from the previous week and in line with expectations. This moderate rise suggests a stable labor market, supporting the overall economic optimism.
Indices Edge Upwards
The Dow Jones Industrial Average, which surged over 1,500 points on Wednesday, continued its upward trend, albeit at a slower pace. The S&P 500 and Nasdaq composite also saw gains, with the latter up 0.69%. The current market sentiment is driven by hopes for a lighter regulatory touch and corporate tax cuts under the new administration.
Bank Stocks and Tech Shares Rally
Financial institutions and technology companies led the rally, fueled by expectations of reduced regulations and potential tax reforms. Additionally, bitcoin saw a significant gain, attributed to the pro-crypto stance of the incoming administration.
Federal Reserve in Focus
As the Fed prepares to announce its interest rate decision, investors are eager to see if it will continue its easing cycle. While expectations for further cuts have declined in recent weeks, a 25-basis-point rate cut is still widely anticipated.
Economic Implications of the Election
Economists warn that the new administration’s campaign proposals, including broad tariffs and mass deportations, may drive inflation. As the market adjusts to this new reality, investors are closely monitoring economic indicators for signs of potential challenges ahead.
Market Snapshot
Here’s a snapshot of the US indexes shortly after the 9:30 a.m. opening bell on Thursday:
- S&P 500: 5,950.88, up 0.37%
- Dow Jones Industrial Average: 43,754.89, up 0.06% (+24.86 points)
- Nasdaq composite: 19,114.17, up 0.69%
Other Market Developments
In commodities, bonds, and crypto, oil futures fell, while gold rose 0.8% to $2,697.40 an ounce. The 10-year Treasury yield slipped three basis points to 4.396%, and bitcoin edged up to $74,891.
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