The S&P 500 momentarily exceeded the 6,000 threshold and wrapped up with its largest weekly percentage increase in a year, driven by Donald Trump’s electoral win and a potential Republican Party dominance in Congress, which raised hopes for advantageous business regulations.
Also bolstering stocks this week was a widely anticipated interest rate reduction of 25 basis points by the Federal Reserve on Thursday.
The S&P 500 and the Dow Industrials (.DJI), opens new tab recorded their finest weekly percentage rise since early November 2023, while the Nasdaq (.IXIC), opens new tab achieved its best week in two months and the second-best week of 2024.
Investors were also keeping an eye on a potential “Red Sweep” as Republicans appeared poised to maintain their slim majority in the House of Representatives after taking control of the Senate, simplifying the path for Trump to implement his legislative agenda.
Anticipations of reduced corporate taxes and deregulation propelled the Nasdaq to record closing highs for three consecutive sessions. The S&P marked its 50th record close of the year.
“It’s a psychologically significant figure but given all the happenings this week, I don’t believe it matters much if we finish at 6,005 or 5,995. The market has surged significantly this week,” remarked Mike Dickson, head of research and quantitative strategies at Horizon Investments in Charlotte, North Carolina.
“There’s been an abundance of positive developments for the market this week as shown by the price movements. All of that overshadows whether we are on the higher or lower side of the 6,000 mark when the closing bells ring.”
The Dow Jones Industrial Average (.DJI), increased by 259.65 points, or 0.59%, reaching 43,988.99, the S&P 500 (.SPX), gained 22.44 points, or 0.38%, to close at 5,995.54, and the Nasdaq Composite (.IXIC), rose by 17.32 points, or 0.09%, to 19,286.78.
Over the week, the S&P 500 climbed by 4.66%, the Nasdaq surged 5.74%, and the Dow ascended 4.61%.
The Dow crossed the 44,000 mark for the first time, partly due to a late rally from Salesforce (CRM.N), which rose 3.59% after Bloomberg reported the software giant plans to add 1,000 staff to promote its artificial intelligence Agentforce Tool.
The S&P 500 and Nasdaq achieved their fourth consecutive session of increases.
Rate-sensitive sectors like real estate (.SPLRCR) and utilities (.SPLRCU) were the top performers among the 11 major S&P 500 sectors as Treasury yields fell for the second session in a row following a significant rise post-election.
However, the benchmark 10-year U.S. Treasury note yield (.YS10YT=RR) remained close to a four-month peak, and markets have moderated predictions for the speed of Fed rate cuts in 2025 as concerns linger over the proposed tariffs by the incoming administration that could reignite inflation.
The small-cap Russell 2000 (.RUT) also advanced, gaining 8.51% for the week, marking its highest weekly percentage increase since April 2020, as domestically-focused stocks are viewed as likely beneficiaries of eased regulations, reduced taxes, and minimized exposure to import tariffs.
