S&P 500 nears 6,000 mark as Trump win, rate cut keep rally alive

Reuters

S&P 500 nears 6,000 mark as Trump win, rate cut keep rally alive

8. Nov. 2024 um 5:13 nachm. GMT

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Indexes: Dow up 0.57%, S&P 500 up 0.34%, Nasdaq down 0.06%

Updated at 11:46 a.m. ET/ 1646 GMT

By Lisa Pauline Mattackal and Ankika Biswas

Nov 8 (Reuters) -The S&P 500 index inched closer to the 6,000 mark and the Dow gained on Friday, 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.

Both the indexes are set for their best week since last November, while the Nasdaq .IXIC is on track for its best in two months and second-best week in 2024.

Expectations of lower corporate taxes and looser regulations under Republican Donald Trump helped the benchmark index .SPX and Dow .DJI notch intraday record highs for the third straight session.

The upbeat sentiment got a boost from the Federal Reservecutting the benchmark rate by 25 basis points on Thursday, with Chair Jerome Powell saying that the election outcome would not have a "near-term" impact on the monetary policy.

The small-cap Russell 2000 .RUT rose 0.2% on the day, also set for its best week in four years.

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 lifting inflation.

"The VIX has also gone down a ton - that means that there's a lot of optimism out there," said Ryan Dykmans, chief investment officer at Dunham & Associates Investment Counsel.

The markets may be underpricing the risk of higher inflation and interest rates, he said. "I'm still of the camp that the next seven or eight months worth of (Fed) cuts are very uncertain."

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.

At 11:46 a.m. the Dow Jones Industrial Average .DJI rose 248.48 points, or 0.57%, to 43,977.82, the S&P 500 .SPX gained 20.53 points, or 0.34%, to 5,993.63 and the Nasdaq Composite .IXIC lost 11.08 points, or 0.06%, to 19,258.38.

Rate-sensitive technology stocks .SPLRCT eased 0.2%, while materials .SPLRCM was the biggest decliner. However, the utilities .SPLRCU and real estate .SPLRCR sectors gained more than 1% each.

Shares of chipmaker Nvidia NVDA.O dipped 1.1% after the AI pioneer became the first in history to surpass a $3.6 trillion in market value on Thursday.

Airbnb ABNB.O dropped 8.2% after missing third-quarter profit estimates, while Pinterest PINS.N slumped 16% 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 JD.O and Alibaba BABA.K fell around 6% 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 1.48-to-1 ratio on the NYSE and by a 1.06-to-1 ratio on the Nasdaq.

The S&P 500 posted 76 new 52-week highs and seven new lows while the Nasdaq Composite recorded 162 new highs and 81 new lows.

S&P 500 Futures https://reut.rs/3Cjg5Na

US inflation and interest rates https://reut.rs/4fhWbAy

Reporting by Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by Arun Koyyur

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