US markets set for best week this year on Trump win, interest rate cut

The S&P 500 and the Dow edged higher on Friday, putting them on course for their best week this year, as a sweeping Trump victory powered bets of a business-friendly agenda and an expected interest-rate cut eased pressure on the U.S. economy.

 

Expectations of lower corporate taxes and looser regulations under Republican Donald Trump helped the S&P 500 and Dow notch intraday record highs for the third straight session. 

The benchmark index crept close to the 6,000 mark as the upbeat market sentiment got a further boost from the Federal Reserve cutting the benchmark rate by 25 basis points on Thursday. 

 

Chair Jerome Powell said the election outcome would not have a "near-term" impact on the monetary policy, easing some immediate worries of higher inflation and public debt from Trump's potentially high spending plans. 

The Dow and the S&P 500 are set for their best week since last November, while the Nasdaq is on track for its best in two months and second-best week in 2024. 

"The move this week in stocks was extreme, and speaks volumes about just how much the market loves having certainty, which we have, now that the presidential election outcome is known," said Clark Geranen, chief market strategist, CalBay Investments. 

"The S&P 500 closing in on the 6,000 mark could invite even more investor interest in stocks, since there is still plenty of money sitting on the sidelines in money market funds and in bonds." 

Traders, however, have already cut expectations for rate cuts next year and bond yields have jumped to multi-month highs on worries of complications to the Fed's monetary easing path from Trump's expansionary policies. 

Powell said the central bank would begin estimating the impact on its twin goals of stable inflation and maximum employment when the new administration's proposals take shape. 

The small cap Russell 2000 rose 0.2% on the day, also set for its best week since last November. 

The Dow Jones Industrial Average rose 98.82 points, or 0.23%, to 43,828.16, the S&P 500 gained 11.60 points, or 0.19%, to 5,984.70 and the Nasdaq Composite gained 3.17 points, or 0.02%, to 19,272.63. 

Rate sensitive technology stocks eased 0.2%, while materials was the biggest decliner. However, the utilities and real estate sectors gained about 1% each.

 

Shares of chipmaker Nvidia dipped 0.5% after the AI pioneer became the first in history to surpass a $3.6 trillion in market value on Thursday. 

Airbnb dropped 7.8% after missing third-quarter profit estimates, while Pinterest slumped 13.7% after a disappointing revenue forecast. 

U.S.-listings of Chinese companies lost ground as the government's latest fiscal support measures failed to impress investors. JD.com and Alibaba fell around 4.5% each. 

Investors are also keeping an eye on a likely "Red Sweep" as Republicans were set to keep their narrow lead in the House of Representatives after winning control of the Senate. That would make it easier for Trump to enact his legislative plans. 

Advancing issues outnumbered decliners by a 1.32-to-1 ratio on the NYSE and by a 1.08-to-1 ratio on the Nasdaq. 

The S&P 500 posted 44 new 52-week highs and six new lows while the Nasdaq Composite recorded 103 new highs and 47 new lows.