A welcome return. The New York Stock Exchange continued its run to records on Friday, still driven by Donald Trump’s return to the White House, and its three-star indices reached new highs. The Dow Jones rose 0.59%, the Nasdaq index rose 0.09% and the broader S&P 500 index rose 0.38%.
The American market continues to welcome Donald Trump’s arrival in power on Friday, which “will promote lower tax rates for businesses and less regulation”, Patrick O’Hare, analyst, commented to AFP from Briefing.com. “We are seeing the continuation of the post-election momentum (…) and investors fear missing out on further gains,” he added.
For the first time during the session, the S&P 500 exceeded 6,000 points and the Dow Jones exceeded 44,000 points. At the same time, investors are still seduced by the new rate cut announced on Thursday by the US central bank (Fed) and by the image of good economic health in the United States. The publication during the session of the American consumer confidence index, at its highest level in November for six months, also brought the indices to New York on Friday.
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“Consumer optimism regarding improving incomes” in particular “contributed to the increase in overall results,” Jose Torres, an analyst at Interactive Brokers, said in a note. On the bond market, the interest rate on 10-year US government bonds stood at 4.30%, compared to 4.33% at the close the day before.
On the stock market, industrial stocks were in demand: GE Aerospace (+3.33%), Lockheed Martin (+2.31%) and Honeywell (+0.91%) are all up. After weakening the day before, financial stocks regained color, such as Goldman Sachs (+1.22%), American Express (+0.27%), JPMorgan Chase (+0.40%) or Wells Fargo ( + 0.89%).
If Telsa took off by 8.19% on Wednesday, with a jump of 15%, it obviously owes it to the support shown by its boss Elon Musk to Donald Trump during his campaign. However, large-cap companies in the technology sector, including semiconductor giants, collapsed. Qualcomm (-1.16%), Micron (-1.33%), Broadcom (-0.09%) and AMD (-1.24%) all closed in the red. Nvidia, which entered the Dow Jones index on Friday, replacing its competitor Intel (-0.11%), lost 0.84%.
Interview: Time.news Editor with Patrick O’Hare, Market Analyst from Briefing.com
Time.news Editor: Welcome, Patrick! Thank you for joining us today. It seems the American stock market is on a remarkable upswing, particularly with Donald Trump’s return to power. Can you elaborate on what this means for the market?
Patrick O’Hare: Absolutely, and thank you for having me. The recent rally we’re witnessing can largely be attributed to the optimism surrounding Trump’s policy agenda. Investors anticipate that his administration will push for lower tax rates for businesses and a reduction in regulatory burdens, which is driving confidence in the market.
Time.news Editor: In your comments, you mentioned the “post-election momentum.” Could you explain how that momentum has played out in the stock indices?
Patrick O’Hare: Certainly. After the election, we saw a collective enthusiasm from investors who feared missing out on potential gains. This led to a significant uptick in buying activity. The indices we follow — the Dow Jones, the Nasdaq, and the S&P 500 — have achieved unprecedented levels, with the S&P surpassing 6,000 points for the first time and the Dow exceeding 44,000. It’s a clear sign of investor sentiment aligning with broader economic expectations.
Time.news Editor: That’s quite impressive! Now, in addition to Trump’s policies, there are also implications from the Federal Reserve’s recent rate cut. How do you see this affecting investor behavior?
Patrick O’Hare: The Fed’s decision to cut rates has certainly added fuel to the fire. Lower interest rates typically encourage borrowing and investing, which can further stimulate economic growth. This can make equities more attractive compared to other asset classes, like bonds. As a result, many investors are converging on the stock market, pushing these indices higher amidst a backdrop of perceived economic resilience.
Time.news Editor: Interesting! On another note, we’ve seen consumer confidence rising, hitting its highest level in six months. How important is consumer sentiment in this current economic landscape?
Patrick O’Hare: Consumer confidence plays a vital role in driving economic activity. When consumers feel confident, they’re more likely to spend, which in turn drives business revenues and potentially leads to job growth. The latest consumer confidence index reflects a positive sentiment which supports the bullish outlook for the markets. When consumers are optimistic, it creates a ripple effect that can uplift entire sectors of the economy.
Time.news Editor: Great insights, Patrick! As we look to the future, what should investors keep an eye on to navigate this current market climate effectively?
Patrick O’Hare: Investors should certainly watch for any shifts in policy from the Trump administration, ongoing Federal Reserve communications, and the health of key economic indicators like employment figures and inflation rates. Understanding these factors will be critical as they can significantly influence market movements.
Time.news Editor: Thank you so much for sharing your expertise today, Patrick. It’s clear that the interplay between policy, market sentiment, and consumer confidence will be pivotal in shaping the economic landscape in the months to come.
Patrick O’Hare: Thank you for having me! It’s always a pleasure to discuss these important market dynamics.