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A trader reacts at the New York Stock Exchange, at the end of the trading day, after Republican presidential nominee Donald Trump became U.S. president-elect, in New York City, U.S., November 6, 2024.
Andrew Kelly | Reuters
The S&P 500 pushed higher on Friday as traders digested this week’s postelection rally and the latest Federal Reserve monetary policy moves.
The S&P 500 climbed 0.3%, while the Dow Jones Industrial Average climbed 240 points, or nearly 0.6%. Both of those averages hit intraday record highs. The tech-heavy Nasdaq Composite lagged, dipping 0.1%.
All three of the major averages are on pace for strong weekly gains, thanks in large part to Wednesday’s huge rally in the wake of President-elect Donald Trump’s victor. Entering Thursday, the S&P 500 was up about 4.4% and the Dow was higher by 4.2%. Both indexes are on track for their best week since November 2023. The Nasdaq is the outperforming even those moves, toting a 5.7% advance through Thursday’s close.
Small cap stocks have also been red hot, with the Russell 2000 up more than 7% for the week through Thursday.
“Equities are eager to price in Trump’s domestic growth policies (via small-caps) and hopes for easier regulation relative to the Biden administration,” Barclays strategist Venu Krishna said in a note to clients.
“Whether these moves are sustainable remains to be seen; momentum is extending lofty gains as ‘winners keep winning’, and the sharp post-Election Day moves have pushed major gauges near (or into, in the case of [Russell 2000]) technically overbought territory,” Krishna added.
Investors generally view a Republican-controlled government as more favorable on expectations for deregulation, the potential for more mergers and acquisitions and proposed tax cuts. However, concerns over the large federal deficit and increased tariffs have also sparked concerns of an uptick in inflation.
Some stocks associated with Trump were performing well again on Friday. Tesla, whose CEO Elon Musk campaigned with the president-elect, rose 3% and was on track for its fourth-straight positive session. Law enforcement tech stock Axon Enterprises jumped 12% after the company raised its full-year revenue guidance.
Stocks also got a boost from the Federal Reserve this week, as the central bank lowered interest rates by a quarter point on Thursday. Fed Chair Jerome Powell noted he is “feeling good” about the economy during a press conference following the change.
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