Most U.S. stocks experienced an upward trend on Monday, building on the gains achieved during their best week of the year. The S&P 500 saw a marginal increase of 0.1% in afternoon trading, with two-thirds of the stocks in the index rising. This comes on the heels of a remarkable 4.7% surge last week, driven by Donald Trump’s presidential victory and the Federal Reserve’s decision to reduce interest rates by a quarter-point to stimulate the economy.
As of 1:59 p.m. Eastern time, the Dow Jones Industrial Average climbed by 322 points, or 0.7%, while the Nasdaq composite saw a slight decrease of 0.1%. A significant contributor to the S&P 500’s rise was Tesla, whose stock surged 8.1% following its leader Elon Musk’s growing relationship with Trump. Tesla’s shares rose nearly 15% the day after the election and have continued to gain momentum since then.
Several stocks benefiting from what analysts refer to as the “Trump trade” also played a role in boosting the market. Banks like JPMorgan Chase, which was up by 1.2%, are thriving under expectations of enhanced economic growth, reduced regulation, and increased mergers and acquisitions. Anticipation regarding mergers, such as a potential deal between insurers Cigna Group and Humana, has energized market speculation, though Cigna later declared it was not pursuing any acquisition with Humana. Consequently, Cigna’s stock climbed by 7.7%, while Humana’s fell by 2%.
Smaller companies, represented by the Russell 2000 index, outperformed as well, rising by 1.5%. These companies are perceived to be better positioned to capitalize on Trump’s “America First” policies compared to large multinational corporations.
Earnings reports also contributed positively. Companies reported better-than-expected summer profits, with Aramark’s stock increasing by 0.8% after showcasing broad growth.
Meanwhile, the cryptocurrency market witnessed significant fluctuations, with Bitcoin rising above $86,000 and hitting a record of $86,375. Trump’s favorable stance toward cryptocurrencies has sparked interest in making the U.S. a global hub for digital currencies.
Other economic indicators included rising Treasury yields due to anticipated economic growth. However, concerns loom about the potential for inflation if the Fed continues to cut rates. Notably, trading in bond markets was closed on Monday in observance of Veterans Day.
International markets displayed mixed results, with European markets climbing while stocks in South Korea and Hong Kong declined.
In summary, U.S. stocks are showing resilience amid a favorable economic outlook, buoyed by political shifts and positive earnings announcements. The cryptocurrency market is also benefiting from this optimistic atmosphere, suggesting a robust investment landscape ahead.
This positive outlook indicates a potential for continued growth in both traditional and digital assets, keeping investors optimistic about opportunities in the market.