Wall Street Rallies as S&P 500 and Dow Head for Best Week Since November

Markets Surge Ahead of Trump’s Inauguration

Wall Street’s major indexes climbed on Friday, with the S&P 500 and Dow Jones Industrial Average on track for their biggest weekly gains since November. The rally comes as investors anticipate pro-growth policies from the incoming Trump administration.

As of 9:49 a.m. ET:

• The Dow Jones Industrial Average rose 355.82 points (0.82%) to 43,508.16.
• The S&P 500 gained 52.44 points (0.89%) to 5,990.17.
• The Nasdaq Composite added 254.87 points (1.30%) to 19,588.75.

Technology Stocks Lead the Charge

Nine of the 11 S&P 500 sectors advanced, with technology stocks leading the way:

• Nvidia (NVDA.O) gained 2.1%.
• Broadcom (AVGO.O) rose 2.2% after Barclays raised its price target.
• Intel (INTC.O) surged 8.2% on speculation of a potential takeover.
• The Philadelphia Semiconductor Index (.SOX) jumped 1.9%.

Banking Stocks and Earnings Drive Optimism

The S&P 500 banking index (.SPXBK) surged 6.1% this week, with regional banks (.KRX) soaring 7.6%, outperforming the broader market.

Better-than-expected bank earnings and cooling inflation data have encouraged risk-taking on Wall Street, boosting sentiment ahead of Trump’s first full week in office.

“Even if there’s tariffs, the underlying tone is that Trump’s policies are going to be pro-growth, and Trump’s a businessman, so he understands money. That’s why investors are bullish going into the weekend,” said Adam Sarhan, CEO of 50 Park Investment.

Fed Policy and Inflation Concerns Remain

While investors are optimistic, some are wary that Trump’s tariffs and immigration policies could spark a trade war or inflationary pressures, potentially delaying Federal Reserve rate cuts.

• Cleveland Fed President Beth Hammack warned that inflation remains a concern, despite signs of easing.
• Traders expect the Fed to keep rates unchanged at its next meeting, with a first rate cut likely in July, according to LSEG data.
• Earlier this week, markets had priced out any rate cuts for 2025, but sentiment has since shifted.

Housing and Energy Stocks See Gains

Economic data showed single-family homebuilding increased solidly in December, lifting the housing index (.HGX) by 1%.

Earnings-driven stock moves:

• SLB (SLB.N) jumped 5.7% after beating Q4 profit estimates.
• Truist Financial (TFC.N) gained 5.5%, reporting higher interest income.
• J.B. Hunt (JBHT.O) fell 6.5% after missing Wall Street profit forecasts.

Social Media Stocks React to TikTok Ruling

Social media stocks saw choppy trading after the Supreme Court ruled against TikTok, upholding a law that could force ByteDance to sell or face a U.S. ban.

• Meta (META.O) gained 1.1%.
• Snap (SNAP.N) added 0.2%.

Market Breadth and Technical Strength

Market breadth remained strong, with advancing stocks significantly outpacing decliners:

• On the NYSE, winners outnumbered losers 4.52-to-1.
• On the Nasdaq, the ratio was 2.54-to-1.

New highs and lows:

• The S&P 500 recorded 14 new 52-week highs and no new lows.
• The Nasdaq Composite posted 47 new highs and 24 new lows.

Looking Ahead

Investors remain on edge for insights into Trump’s economic plans, particularly regarding:

• Tax cuts.
• Tariffs.
• Regulatory changes.
• Immigration policies.

With markets rallying into the weekend, traders will be closely watching Trump’s inauguration speech and its potential impact on stocks, bonds, and Federal Reserve policy.