Wall Street Hovers Near Record High As Trump-Fuelled Rally Continues

Wall Street’s main indexes were near record highs on Monday, holding on to post-election gains, ahead of the next batch of economic data that could decide whether the equity rally can sustain itself. Several stocks that gained following the U.S. election results continued their upward trajectory.

Tesla (TSLA.O) jumped 7.4 per cent after touching $1 trillion in market value on Friday for the first time since 2022. The EV maker gave a boost to consumer discretionary shares (.SPLRCD) with the sector at a record high.

The small-cap Russell 2000 (.RUT), opens new tab jumped 1.6 per cent to its highest level since last November and was near a record high, with the stocks expected to be a key beneficiary of President-elect Donald Trump’s proposed tax cuts and on expectations of an easier regulatory environment.

“Assuming that Trump and Congress can deliver on even a few promised tax reforms and de-regulations, and if the economy stays healthy, it’s reasonable to expect current trends to continue,” said Mark Malek, chief information officer at Siebert.

The Nasdaq, however, retreated after hitting a record high as megacap stocks weighed. Information technology shares (.SPLRCT) fell one per cent and chip stocks (.SOX) were down three per cent, led by a 21 per cent slump in Monolithic Power Systems (MPWR.O).

“Last week’s moves were substantial, so expect some volatility and sideways trading until the new lawmakers are seated and policies become clear,” Malek added.

The Dow Jones Industrial Average (.DJI) rose 374.85 points, or 0.85 per cent, to 44,363.84, the S&P 500 (.SPX) gained 14.29 points, or 0.24 per cent, to 6,009.83, and the Nasdaq Composite (.IXIC) lost 12.66 points, or 0.07 per cent, to 19,274.12.

Financial stocks (.SPSY) jumped 1.85 per cent to a record high, with banks giving the biggest boost to the Dow. The three main Wall Street indexes soared in the previous week as Trump retook the White House.

The benchmark S&P 500 (.SPX) briefly crossed the 6,000 mark on Friday and the Dow (.DJI) touched 44,000 points for the first time. Crypto stocks rallied as bitcoin soared past $84,000 on Monday.

Coinbase Global (COIN.O) jumped 17 per cent and bitcoin miners MARA Holdings (MARA.O) and Riot Platforms (RIOT.O), opens new tab gained 21 per cent and 16.2 per cent, respectively.

Focus will now be on consumer price inflation data, due Wednesday, and a raft of other key data this week for signals on the economy and monetary policy outlook.

The U.S. Federal Reserve cut interest rates by 25 basis points as expected last week, and investors see a 65.1% chance of the same move at its December meeting, according to CME FedWatch, though they have begun dialing back expectations for easing next year.