US equity benchmarks gained slightly on Friday, as investors assessed Thursday’s Federal Reserve interest rate reduction.
On Thursday, the US Fed lowered interest rates 25 basis points. Chair Jerome Powell also hinted that monetary policy would be further eased in coming months.
The Dow Jones Industrial Average soared 300 points during its peak session, and surpassed the 44,000-mark for the very first time.
Recent increases in the stock market have been by as much as 250 points.
Both the S&P 500 and Dow Jones Industrial Average reached intraday records. The tech-oriented Nasdaq composite lagged behind, falling 0.1%.
The post-election rally following Donald Trump’s victory in the US Presidential election of 2024 on Wednesday was driving all three benchmarks to strong gains for the week.
CNBC reported that both Dow Jones (DJ) and S&P 500 (S&P 500) were set to have their best weeks since November 2023.
CNBC reported that Barclays’ Venu Krishna, a strategist at Barclays Bank in New York City said: “Equities want to reflect Trump’s policies for domestic growth (via small caps) and the hope of easier regulations relative to Biden Administration.”
The question is whether these gains are sustained. As ‘winners continue to win’, momentum has extended lofty gains, while the sudden moves after Election Day have brought major gauges close (or, as in [Russell, 2000], into) overbought technical territory.
Oil prices fell more than 2 percent on Friday, as supply risks decreased.
The US Gulf of Mexico was spared any disruptions to supply due to Hurricane Rafael, which is expected move westwards.
The oil prices are also being impacted by the Trump administration, as it is expected that more drilling will be done for gas and oil on US federal lands. This could lead to an increase in production.
ARK Innovation ETF soars
Cathie Woods’ ARK Innovation ETF soared by 11.6% last week and is on track to have its best weekly performance since November of 2017.
CNBC reports that Coinbase, Palantir, and Robinhood are among the notable leaders of this fund. They benefit, they believe, from a looser regulatory environment under Trump’s administration.
The ETF had gained 0.6% since Thursday’s closing.
NVIDIA joins Dow officially
NVIDIA Corporation, a chip-giant company, joined Dow Jones Industrial Average on Friday.
It was announced last week that Sherwin Williams and NVIDIA would join the benchmark of 30 stocks.
Dow Inc. and Intel are replaced by both stocks
NVIDIA Corporation shares were however down by more than 1% at the time this article was written. Stock has risen by over 220% in the past year.
Nasdaq weighed down by media and semiconductor stocks
On Friday, chip stocks including NVIDIA underperformed, which affected the Nasdaq Composite.
On Friday, the VanEck Semiconductor ETF fell 0.8% while Arm Holdings dropped 3%.
After Paramount Global reported weak third-quarter earnings, media stocks including Paramount Global were down by 4%.
Warner Bros., a rival company. Discovery fell by 4% in Friday’s trading session. The advertising stock The Trade Desk also plunged by 9%.
The Trade Desk declined despite positive earnings in the third quarter.
Tesla’s market cap reaches $1 Trillion
Elon Musk’s Tesla shares jumped by 6% Friday, continuing its rally following the election.
Tesla’s stock market value has now surpassed $1 trillion, a first for Tesla.
Stocks of the company rose by more than 27 percent this week, after Trump won his second term as president in America. Musk’s close relationship with Trump was seen as a positive factor for business.
Tesla CEO Musk is one of many prominent figures who backed Trump’s second term in office as US president.
China announces stimulus package
China announced on Friday a $1.4 trillion stimulus package to assist in reducing local government debt.
On Friday, the National People’s Congress concluded its week-long session and announced new measures for local government growth.
In the US, University of Michigan’s Consumer Sentiment Index came out at 73 for November. Index rose to highest since April.
This reading is also higher than the expected 71, and it was better than 70.5 in October.
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