Stock Market Rallies to Its Best Week in Over a Year

President-elect Donald Trump’s win, coupled with a quarter-point interest rate cut from the Federal Reserve, pushed major stock indexes into record territory.

by · NY Times

Stocks rose on Friday, capping the market’s best week in over a year and extending a rally that came as President-elect Donald J. Trump’s decisive election win put an end to months of uncertainty for investors.

The S&P 500 rose almost 0.4 percent on Friday, its fourth consecutive daily increase, and briefly crossed above 6,000 points for the first time ever. For the week, the index gained 4.7 percent.

Mr. Trump’s victory ushered in a relief rally that’s typical in the immediate aftermath of a presidential election as the vote becomes clear. Stocks were also buoyed by investors’ expectations of business-friendly policies under the Trump administration, including lighter regulation and tax cuts.

“The move this week in stocks was extreme, and speaks volumes about just how much the market loves having certainty,” said Clark Geranen, chief market strategist at CalBay Investments.

The Russell 2000, an index of smaller companies more closely tied to the ebb and flow of the economy, ended the week up 8.5 percent, its biggest weekly rise since April 2020 and the initial market recovery from the impact of the coronavirus pandemic. Sectors and companies that stand to benefit from Mr. Trump’s proposed agenda saw the biggest gains after his win, helping lift major stock indexes.

Tesla, the electric vehicle company run by Elon Musk, who in recent months has become one of Mr. Trump’s most prominent backers, saw its shares jump almost 15 percent on Wednesday in response to the election results. The company’s stock ended the week with a 29 percent gain, taking its market valuation above $1 trillion.

Trump Media & Technology Group, the parent company of Truth Social and with the president-elect as its largest shareholder, swung wildly even after his victory. Mr. Trump said on Friday that he has no intention of selling any of his stake in the company, worth some $4 billion, and its shares gained on Friday. It ended the week up roughly 4 percent.

Bank stocks also led the post-election rally as investors anticipate more corporate mergers and acquisitions under the incoming Trump administration. JPMorgan Chase, the nation’s largest bank, rose 0.25 percent on Friday.

Tuesday’s vote fueled this week’s rally, but the Federal Reserve’s decision on Thursday to cut interest rates by a quarter percentage point — the central bank’s second rate cut of 2024 — also drove stocks higher.

While the stock market embraced Mr. Trump’s win, his policy proposals, which many economists and investors worry could reignite inflation, generated unease in the bond market. Yields on government bonds started to climb weeks ago in anticipation of a Trump win, and they jumped even further once the results became clear. The 10-year Treasury yield rose 0.2 percentage points on Wednesday, its biggest daily move in more than two years.

But the Treasury market stabilized later in the week, with the 10-year yield — which underpins borrowing such as mortgage rates — ending the week at 4.3 percent, slightly lower than where it had started. Traders had largely already priced in Mr. Trump’s win, allowing yields to achieve some stability, said John Canavan, the lead analyst at Oxford Economics.

In a research note, Jeff Buchbinder, chief equity strategist at LPL Financial, said that “bond markets seem to be exercising caution here.”

Joe Rennison contributed reporting.

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