Jamie Spencer
The Dow Jones Industrial Average and S&P 500 surged to new all-time highs on Monday as investors welcomed President-elect Donald Trump’s choice for Treasury secretary. The shortened trading week began with optimism, despite some afternoon pullbacks in the rally.
Record-Setting Market Performance
The Dow climbed 407 points, or 0.9%, while the S&P 500 gained 0.3%, both setting new records during Monday’s session. The Nasdaq Composite also advanced, rising 0.3%. Earlier in the day, the Dow had soared more than 500 points, and the Nasdaq jumped over 1% at its session high.
Small-cap stocks outperformed as the Russell 2000 index surged nearly 2%, also reaching a fresh intraday record.
Market Applauds Scott Bessent as Treasury Secretary
Investors rallied around Trump’s nomination of Scott Bessent, founder of Key Square Group, as Treasury secretary. Bessent is viewed as a market-friendly choice, expected to support equity growth while tempering Trump’s more aggressive protectionist policies.
“I would recommend that tariffs be layered in gradually,” Bessent said earlier this month, emphasizing the need to avoid abrupt price adjustments that could destabilize inflation. His remarks suggest a more measured approach to policy, which markets have embraced.
Quincy Krosby, chief global strategist at LPL Financial, called the market reaction “textbook.” She noted, “You can’t ask for a better reception from the market. This is the market applauding.”
Treasury Yields and Dollar Ease
The market’s positive response extended to other areas. Treasury yields and the U.S. dollar index both pulled back following Friday’s announcement of Bessent’s nomination. The 10-year Treasury yield fell more than 11 basis points on Monday, signaling confidence in the new pick’s ability to balance growth and inflation risks.
Mixed Performance in Technology
Big technology stocks showed mixed results. Companies like Amazon and Alphabet saw gains, while Nvidia and Netflix experienced declines. This divergence reflects the sector’s ongoing recalibration in the face of rising yields and uncertainty surrounding Trump’s broader economic policies.
Post-Election Rally Regains Momentum
Monday’s gains signaled a potential resurgence of the postelection rally. After an initial surge following Trump’s victory, the market had paused as concerns over rising yields and inflation weighed on sentiment. The nomination of Bessent appears to have revived optimism among investors.
Light Trading Ahead of Thanksgiving
With U.S. markets closed on Thursday for Thanksgiving and operating on reduced hours Friday, trading volume is expected to remain light. However, key economic data could influence sentiment during the holiday-shortened week.
- Personal Consumption Expenditures Price Index (PCE): The Federal Reserve’s preferred inflation measure for October is set for release Wednesday.
- Fed Minutes: Investors will also review minutes from the central bank’s most recent policy meeting, which could offer insights into future rate decisions.
The Dow and S&P 500’s record highs reflect renewed investor optimism driven by Scott Bessent’s nomination as Treasury secretary. As markets look to the week’s economic data for further direction, the positive reception signals confidence in a steadying economic outlook. While concerns over inflation and protectionist policies linger, the markets are poised to close the week on a hopeful note.
