Market Optimism Soars Ahead of Trump Inauguration
As the Trump administration prepares to take office, Wall Street is experiencing a surge in optimism, with the S&P 500 and Dow on track to log their largest weekly gains since November. This upward trend is fueled by anticipation of policy changes that could boost the economy.
Tech Sector Leads the Charge
At 9:49 a.m. ET, the Dow Jones Industrial Average rose 355.82 points, or 0.82%, to 43,508.16, while the S&P 500 gained 52.44 points, or 0.89%, to 5,990.17. The Nasdaq Composite saw a significant increase of 254.87 points, or 1.30%, to 19,588.75. Nine out of 11 S&P 500 sectors rose, with technology leading the gains with a 1.4% increase.
Chip Stocks on the Rise
Nvidia gained 2.1% and Broadcom rose 2.2% after Barclays raised its price targets on the stocks, sending the chips index up 1.9%. Intel jumped 8.2% on speculations of a takeover, contributing to the sector’s growth.
Banks and Housing See Significant Gains
Better-than-expected earnings from major banks and signs of cooling inflation have prompted risk-taking on Wall Street this week. The S&P 500 banking index and regional banks have outperformed the main indexes, logging advances of about 6.1% and 7.6%, respectively. Single-family homebuilding also increased solidly in December, with the housing index rising 1%.
Investors Anticipate Trump’s Policy Changes
President-elect Donald Trump’s inauguration speech on Monday is highly anticipated, as investors seek insights into his plans on tax cuts, tariffs, regulations, and immigration. While there are concerns about potential trade wars and price pressures, many believe Trump’s policies will be pro-growth and beneficial to the economy.
Fed Rate Expectations
According to data compiled by LSEG, traders expect the Federal Reserve to leave interest rates on hold at its meeting later this month, with the first rate cut predicted for July. This marks a shift from earlier expectations of no rate cuts for 2025.
Company Performance
SLB gained 5.7% after beating estimates for fourth-quarter profit, while Truist Financial rose 5.5% after reporting a rise in fourth-quarter profit. J.B. Hunt lost 6.5% after missing Street estimates for fourth-quarter profit. Social media firms such as Meta and Snap saw moderate gains in choppy trading following the Supreme Court’s ruling on TikTok.
Market Trends
Advancing issues outnumbered decliners by a 4.52-to-1 ratio on the NYSE and by a 2.54-to-1 ratio on the Nasdaq. The S&P 500 posted 14 new 52-week highs and no new lows, while the Nasdaq Composite recorded 47 new highs and 24 new lows.
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