The Dow Jones Industrial Average and the S&P 500 achieved unprecedented heights on Friday, concluding their most successful week in a year after Donald Trump’s electoral victory. The Dow increased by 259.65 points, equivalent to 0.59%, finishing at 43,988.99, and trading above 44,000 for the first time in history during the session. The S&P 500 saw a rise of 0.38%, closing at 5,995.54 and briefly exceeding the 6,000-point mark.
The Nasdaq, which is known for its tech stocks, slightly trailed behind with a modest increase of 0.09%, reaching 19,286.78, while still achieving an intraday record high. All three major indexes closed the week at record levels, with the S&P 500 advancing by 4.66%, the Dow by 4.61%, and the Nasdaq leading the group with a 5.74% gain. Meanwhile, the small-cap Russell 2000 jumped by an impressive 8.57%.
Typically, investors view a Republican-majority government as a positive regarding deregulation, possible mergers and acquisitions, as well as anticipated tax reductions.
Record highs in markets following election
Nonetheless, worries surrounding the federal deficit and rising tariffs have led to concerns about potential inflation increases.
Some stocks linked to Trump experienced significant upticks; for instance, Tesla, backed by CEO Elon Musk who campaigned alongside Trump, surged 8.2%, pushing its market cap beyond $1 trillion. The Federal Reserve raised interest rates by a quarter percentage point on Thursday, with Fed Chair Jerome Powell expressing optimism about the economy during his press briefing after the announcement. Even with some Wall Street apprehensions regarding market valuations, the vigor of this week’s rally has enhanced investor confidence that there could still be potential for additional gains in the concluding months of the year.
Keith Lerner, co-chief investment officer at Truist Wealth, commented, “Whenever circumstances appear to be favoring growth, it raises the question of what comes next. Although sentiment appears to be somewhat inflated, we still believe maintaining the primary upward trend is advisable.”
Amid various corporate initiatives, the S&P 500 is likely to undergo a rebalancing later this quarter, with engineering firm Emcor being a strong contender for inclusion in the index. The cryptocurrency market also experienced considerable movement, as shares of Coinbase rose by 5% on Friday, while Bitcoin edged up to a new all-time high of $77,014.49.
As the market adapts to the post-election landscape, investor sentiment leans towards cautious optimism, with many hoping for further growth despite potential upcoming obstacles.
