Market Optimism Soars as Trump Names Treasury Secretary
Investor confidence is on the rise, driving US stock index futures to new heights. The catalyst behind this surge is President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary, announced late Friday. This move has sparked hopes that Bessent will implement measures to curb government borrowing, while still honoring Trump’s fiscal and trade commitments.
Fiscal Discipline Takes Center Stage
Bessent’s nomination is seen as a significant positive by investment strategists, who praise his fiscal conservative stance. “This appointment sets the stage for greater fiscal discipline, which the market is eager to see,” notes Joe McCann, CEO of Asymmetric in Miami. Bessent’s background in FX trading and global fixed income is also viewed as a major advantage.
Stock Futures Surge Across the Board
As of 05:08 a.m. ET, Dow E-minis are up 302 points (0.68%), S&P 500 E-minis have gained 28.5 points (0.48%), and Nasdaq 100 E-minis have risen 114.75 points (0.55%). Futures tracking the small-caps index have jumped 1.2%, while the yield on 30-year Treasury bonds has led declines across the curve.
Big Banks and Tech Giants Lead the Charge
Big banks are seeing significant gains, with Wells Fargo up 1.1% and Morgan Stanley adding 1.2% in premarket trading. Popular ‘Trump trade’ Tesla has surged 2%. Megacaps Alphabet and other tech giants have also seen gains, rising 0.75% each.
Treasury Bond Yields Decline
Yields on Treasury bonds had previously spiked following Trump’s election victory, driven by expectations of inflationary pressures and slower monetary policy easing. However, with Bessent’s nomination, yields have begun to decline.
Indices Near Record Highs
The benchmark S&P 500 has crossed 6,000 points for the first time, jumping more than 4% since November 4. The Russell 2000 index has surged over 8% during the same period, with both indexes nearing their respective record highs. Brokerage Barclays has raised its full-year 2025 forecast for the S&P 500 to 6,600 points from 6,500.
Federal Reserve Policy in Focus
Expectations for the Federal Reserve’s policy move in December remain uncertain, with a 56.2% probability of a 25-basis-point rate cut, according to the CME Group’s FedWatch Tool. Investors will closely watch the upcoming Personal Consumption Expenditure report, GDP estimates, and minutes from the Fed’s policy meeting.
Crypto Stocks See Gains
Crypto-related stocks such as MicroStrategy, MARA Holdings, and Coinbase have seen significant gains, with bitcoin prices nearing the $100,000 mark. Meanwhile, Peabody Energy has dropped 5.1% following Anglo American’s decision to sell its Australian steelmaking coal mines to the company. Snowflake has risen 3.6% after Wedbush raised its rating on the stock to “outperform”.
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