The equity market experienced a surge on Friday, with the Dow Jones Industrial Average soaring over 300 points and the S&P 500 achieving its most impressive weekly performance since the aftermath of Donald Trump’s election in November. The Dow increased by 334.70 points, equating to a rise of 0.78%, closing at 43,487.83, while the S&P 500 rose by 1% to 5,996.66, and the Nasdaq Composite grew by 1.51% to 19,630.20. Major technology stocks were significant contributors to the rally, with Microsoft’s shares jumping 3%, Intel’s rising by 3.1%, and Apple increasing by over 1%.
Throughout the week, the Dow and S&P 500 recorded gains of 3.7% and 2.9%, respectively, marking their largest weekly increase since the November election week. Additionally, the Nasdaq advanced by 2.5% for the week, achieving its best weekly performance since early December. These gains come on the heels of consecutive reports indicating a slight easing of inflationary pressures, with the Consumer Price Index rising less than projected year-over-year, alongside a decline in the producer price index for December.
The yield on the 10-year Treasury note dropped significantly as expectations for several interest rate cuts this year increased. Barclays strategist Emmanuel Cau commented in a report on Friday that the better-than-anticipated economic indicators released earlier this week have contributed to the “goldilocks narrative for equities, likely prompting a renewed interest in risk.” Strong earnings from leading banks also lent support to stock prices this week, as they attempted to break free from the sluggish performance seen in December that lingered into early 2025. Major bank shares collectively increased by about 12% over the week, while regional banks saw an 8% uptick during this period.
Major tech companies lead market surge
Looking ahead, investors are anticipating next week, when Donald Trump is scheduled to be inaugurated as president for a second term. Following his November electoral victory, stocks experienced a rally as investors speculated on possibilities for deregulation and tax reductions.
Chris Senyek, the chief investment strategist at Wolfe Research, suggests that the financial sector is likely to benefit the most from forthcoming policies under the Trump administration, highlighting factors such as rising business and consumer confidence, potential extensions of tax cuts, and deregulation as likely positive influences. In other news from the market, shares in social media companies took a hit on Friday, reacting to the Supreme Court’s ruling that upheld the ban on TikTok. Snap plummeted over 3% following the ruling, while Meta Platforms saw a decline of more than 1%.
In contrast, stocks linked to cryptocurrency soared amid reports that President-elect Donald Trump could issue an executive order prioritizing cryptocurrency as a national focus early in his new term. All sectors appear poised to record weekly gains, led by materials, energy, and financials, each up 6% or more for the week. The sector lagging behind is health care, which has only seen a 0.9% increase week-to-date.
As the earnings season heats up and the market awaits Trump’s inauguration, investors maintain a favorable outlook regarding the potential for sustained economic growth and supportive policies across various sectors.
