Market Rally Gains Momentum
The world’s largest technology companies led the charge in a broad stock market rally, as bond yields continued to slide amidst expectations of Federal Reserve rate cuts. This optimism was fueled by news of a phone conversation between US President-elect Donald Trump and Chinese President Xi Jinping, which could set the tone for relations between the two economic powerhouses.
Tech Giants Drive Market Growth
The S&P 500 index rose nearly 1%, poised for its biggest weekly gain since the US election week. The Nasdaq 100 surged over 1.5%, with Intel Corp. jumping 7% on speculation that it may be an acquisition target. The Dow Jones Industrial Average and the Russell 2000 also saw significant gains.
Economic Resilience and Rate Cut Expectations
Trump’s focus on core priorities, such as raising tariffs and cutting taxes, has boosted corporate earnings expectations. Recent data showing cooling inflation has reignited bets on rate cuts, supporting the rally. According to Craig Johnson at Piper Sandler, “This week’s easing inflation data and positive reaction to earnings from several financial companies resulted in a bond and stock rally.”
Market Insights
A Bloomberg gauge of the “Magnificent Seven” megacaps rallied 1.8%, while the yield on 10-year Treasuries declined three basis points to 4.59%. The Bloomberg Dollar Spot Index rose 0.3%, and Bitcoin hovered near $102,000.
Corporate News
In other news, US auto safety regulators are probing General Motors Co. over concerns about engine failure in its full-size pickup trucks and SUVs. Applied Materials Inc. and Lam Research Corp. were upgraded to overweight from sector weight at KeyBanc Capital Markets. The US plans to slash prices for Novo Nordisk A/S blockbusters Ozempic and Wegovy, while J.B. Hunt Transport Services Inc. reported fourth-quarter earnings that trailed consensus expectations.
Global Market Moves
The Stoxx Europe 600 rose 0.8%, while the MSCI World Index rose 0.7%. The Bloomberg Magnificent 7 Total Return Index rose 1.8%, and the Russell 2000 Index rose 1%. In currencies, the euro fell 0.1% to $1.0286, while the British pound fell 0.5% to $1.2183.
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