S&P 500 Set for Best Week Since November Election: Markets Wrap
2 days ago
(Bloomberg) -- A rally in the world’s largest technology companies drove stocks toward their best week since the November presidential election just ahead of Donald Trump’s inauguration.
Most Read from Bloomberg
All major groups in the S&P 500 rose Friday, with the benchmark up about 1%. Tesla Inc. and Nvidia Corp. led gains in megacaps, while Intel Corp. jumped 7% after a report the chipmaker is an acquisition target. Also aiding sentiment were headlines that Trump and Chinese President Xi Jinping discussed trade, TikTok and fentanyl, which could set the tone for relations between the world’s two largest economies.
*SUPREME COURT UPHOLDS LAW THAT THREATENS US TIKTOK SHUTDOWN
Trump, who is set to be sworn in as the 47th US president on Monday, has reiterated his focus on core priorities such as raising tariffs and cutting taxes. Equities rallied following the election on bets that his proposals would boost corporate earnings. While stocks faltered last month on hawkish Fed signals, recent data showing cooling inflation reignited bets on rate cuts.
“This week’s easing inflation data and a positive reaction to earnings from several financial companies resulted in a bond and stock rally,” said Craig Johnson at Piper Sandler. “Recent short-term oversold conditions and weak bullish sentiment are underpinning the recovery of the major indices from within their primary uptrends.”
The S&P 500 rose 0.9%. The Nasdaq 100 climbed 1.5%. The Dow Jones Industrial Average added 0.8%. A Bloomberg gauge of the “Magnificent Seven” megacaps rallied 1.6%. The Russell 2000 advanced 0.6%.
The yield on 10-year Treasuries declined two basis points to 4.6%. The Bloomberg Dollar Spot Index was little changed. Bitcoin jumped to around $104,000.
When Trump takes his oath as the next US president on Monday, stock investors will have one big reason to breathe a sigh of relief. History shows the performance of the equities benchmark over a three-month period usually improves after inauguration day.
History shows that the average three-month performance of the S&P 500 going into the ceremony is just about 1%, compared to a 3.7% rise on the way out, according to Jefferies’ analysis of data going back to 1929.
The index “typically trades lumpy around inaugurations,” the firm’s strategists said, but things start to improve a few months in. In fact, on average the S&P gains 8.3% six months into an inauguration and about 9.5% 12 months in, according to Jefferies.
Trump’s return to the White House will likely shield US stocks from a big selloff, according to Bank of America Corp. strategists, as investors focus on his protectionist agenda and proposals for lower corporate taxes.
US stocks are “protected by Trump” from downside, strategist Michael Hartnett wrote in a note, although he doesn’t expect sharp gains either due to risks including high concentration in mega-cap technology stocks, valuations and investor positioning.
Corporate Highlights:
US auto safety regulators are probing General Motors Co. over concerns that more than 870,000 of its full-size pickup trucks and SUVs face the risk of engine failure.
Applied Materials Inc. and Lam Research Corp. were raised to overweight from sector weight at KeyBanc Capital Markets as the broker repositions semicap coverage toward immediate growth drivers.
The US plans to slash the price it pays for the Novo Nordisk A/S blockbusters Ozempic and Wegovy, the latest drugs to be targeted under legislation that’s expected save the government more than $200 billion over a decade.
J.B. Hunt Transport Services Inc. reported fourth-quarter earnings trailed expectations and it warned about first-quarter results, as well as cost pressures in 2025.
JetBlue Airways Corp. and Southwest Airlines Co. were downgraded to underperform from neutral at Bank of America Corp., which citied their lower exposure to corporate, premium and international routes.
Bumble Inc. founder Whitney Wolfe Herd will return to the dating-app firm as chief executive officer, a year after she handed over the reins to a Slack Technologies Inc. executive.
Toronto-Dominion Bank is moving up the start date for its new chief executive officer, Raymond Chun, by two months and slashed executives’ pay in the wake of its historic and costly money-laundering scandal.
Rio Tinto Group and Glencore Plc have held early stage talks about combining their businesses to create a behemoth to rival longstanding industry titan BHP Group.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.9% as of 10:37 a.m. New York time
The Nasdaq 100 rose 1.5%
The Dow Jones Industrial Average rose 0.8%
The Stoxx Europe 600 rose 0.7%
The MSCI World Index rose 0.8%
Bloomberg Magnificent 7 Total Return Index rose 1.6%
The Russell 2000 Index rose 0.6%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0310
The British pound fell 0.3% to $1.2202
The Japanese yen fell 0.5% to 155.98 per dollar
Cryptocurrencies
Bitcoin rose 3.9% to $104,015.73
Ether rose 3.1% to $3,422.19
Bonds
The yield on 10-year Treasuries declined two basis points to 4.60%
Germany’s 10-year yield declined three basis points to 2.52%
Britain’s 10-year yield declined five basis points to 4.63%
Commodities
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Sujata Rao, Margaryta Kirakosian and John Viljoen.
