Wall Street today: US stocks are on track to close their best week in a year with some modest moves on Friday, November 8, after Republican Donald Trump won the US presidential elections 2024 and the US Federal Reserve cut interest rates again by 24 basis points (bps) in its latest monetary policy decision.
The S&P 500 was 0.3 per cent higher in afternoon trading and on track for its biggest weekly gain since early November 2023. The Dow Jones Industrial Average was up 230 points, or 0.5 per cent, and the Nasdaq composite was virtually unchanged. The relatively quiet trading follows big gains and more records for indexes earlier in the week after the electoral verdict in the US.
The S&P 500 will likely hit its 50th record this year amid a weekly gain of 4.7 per cent. The VIX Index, a measure of volatility known as the “fear gauge,” saw its biggest weekly drop since 2021. Tesla hit a market cap of $1 trillion.
Axon Enterprise, which sells Tasers and body cameras used by police officers, helped lead the market. It jumped 21.5 per cent after delivering stronger profit for the latest quarter than analysts expected. It also raised its revenue forecast for the full year to $2.07 billion, which would mean 32 per cent growth.
Expedia Group rose 6.2 per cent after likewise topping profit expectations. It said booked room nights rose nine per cent from a year earlier. Helping to keep the market in check was Airbnb, which sank 8.3 per cent after the online vacation rental platform posted a mixed third-quarter earnings report and issued forecasts for the fourth quarter that disappointed investors.
Shares of digital pinboard and shopping site Pinterest slid 16.7 per cent after the company’s revenue guidance came in lower than investors expected, even as it easily beat Wall Street’s sales and profit targets. In the bond market, longer-term Treasury yields eased.
This morning's preliminary report suggested sentiment among US consumers rose for a fourth straight month to its highest level in six months. The survey from the University of Michigan, conducted before Tuesday's election, also said expectations for inflation in the coming year eased to the lowest level since 2020.
The yield on the 10-year Treasury fell to 4.31 per cent from 4.33 per cent late Thursday. But it is still well above its mid-September high of nearly 3.60 per cent. Treasury yields climbed largely because the US economy has remained much more resilient than feared.
Market participants hope it can stay solid as the US Federal Reserve cuts the benchmark interest rates to keep the job market humming. The US Fed’s action has helped bring retail inflation nearly down to its two per cent target.
Some of the rise in yields has also been due to Trump. He discusses tariffs and other policies that economists say could drive inflation, the US government’s debt, and higher economic growth. Because of that, traders have already begun paring forecasts for how many cuts to rates the US Fed will deliver next year. Lower rates can boost the economy, but they can also fuel inflation.
US banks and the stocks of more domestically focused companies have seen some of the wildest moves as some of the poster children of the “Trump trade.” The stock that’s become synonymous with the president-elect, Trump Media & Technology Group, rose 11.6 per cent Thursday and is on track for a slight gain this week.
Amid Bitcoin’s surge, the largest ETF holding the coin claimed its biggest one-day haul since inception. Even Dogecoin, a cryptocurrency created as a joke in 2013 that considers Elon Musk among its most ardent and vocal supporters, hit a new high.
In stock markets abroad, Donald Trump’s talk about tariffs has raised worries about possible trade tensions and disruptions to the global economy. European indexes were mostly lower and on track to log a weekly loss. Germany's DAX stock index fell 0.8 per cent a day after posting its best daily performance of 2024 so far, helped by expectations that Germany could scrap its debt brake.
Financial markets worldwide have swung sharply as investors bet on what Trump's plans for higher tariffs, lower tax rates, and lighter regulation could mean for the global economy. However, many professional investors have also urged caution, saying snapbacks in prices could occur as it becomes clearer what proposals will become policy rather than just negotiating starting points.
An MSCI index for world stocks was flat but still close to a record high, while the pan-European STOXX 600 lost 0.7 per cent. Markets in Hong Kong and Shanghai fell as investors awaited Beijing's much-anticipated steps to rev up the slowing Chinese economy following the legislature’s Standing Committee meeting. Officials announced a $839 billion, three-year plan to help local governments refinance their many trillions of debt that has snowballed during the COVID-19 pandemic and a collapse of the property market.
With inputs from AP, Bloomberg, and Reuters
