By US equity benchmarks rose slightly on Friday as investors assessed the Federal Reserve’s interest rate cut on Thursday.
The US Fed cut interest rates by 25 basis points on Thursday, and Chair Jerome Powell hinted at further easing of monetary policies in the coming months.
At the time of writing, the Dow Jones Industrial Average surged over 300 points at its session peak, surpassing the 44,000 mark for the first time.
It was recently up by 250 points.
The S&P 500 gained 0.4%, with both indices reaching intraday record highs. Meanwhile, the tech-focused Nasdaq Composite lagged, slipping 0.1%.
All three benchmarks were, however, on course for strong weekly gains, driven by the post-election rally after Donald Trump’s win in the 2024 US presidential election on Wednesday.
According to a CNBC report, both Dow Jones and S&P 500 were on track for their best week since November 2023.
“Equities are eager to price in Trump’s domestic growth policies (via small-caps) and hopes for easier regulation relative to the Biden administration,” CNBC quoted Barclays strategist Venu Krishna in a report.
Whether these moves are sustainable remains to be seen; momentum is extending lofty gains as ‘winners keep winning’, and the sharp post-Election Day moves have pushed major gauges near (or into, in the case of [Russell 2000]) technically overbought territory.
Meanwhile, oil prices slumped more than 2% on Friday as risks to supply subsided.
Hurricane Rafael was expected to move westwards over the US Gulf of Mexico, alleviating concerns of disruptions in supply from the region.
Oil prices were also under pressure as a Trump presidency is likely to see more drilling for oil and gas on federal US lands, which could increase production from the world’s largest producer.
ARK Innovation ETF surges
Cathie Woods’s ARK Innovation ETF surged 11.6% this week, and was on course for its best week since November last year.
Notable leaders in the fund this week include Coinbase, Palantir and Robinhood, which are believed to benefit from loose regulations under a Trump administration, CNBC reported.
At the time of writing, the ETF was 0.6% up through Thursday’s close.
NVIDIA officially joins Dow
On Friday, chip giant NVIDIA Corporation joined the Dow Jones Industrial Average.
Last week, it was announced that NVIDIA and Sherwin Williams would officially join the 30-stock equity benchmark.
Both stocks replace Intel and chemical company Dow Inc.
However, shares of NVIDIA Corporation were down more than 1% on Friday at the time of writing. The stock has gained over 220% over the last one year.
Semiconductor, media stocks weigh on Nasdaq
Chip stocks, including NVIDIA, were underperforming on Friday, which weighed on the Nasdaq Composite.
The VanEck Semiconductor ETF dipped 0.8%, while Arm Holdings fell 3% on Friday.
Media stocks, including Paramount Global, were down 4% after the company posted weak earnings for the third quarter.
Rival Warner Bros. Discovery also fell 4% on Friday’s session, while advertising stock The Trade Desk tanked 9%.
The Trade Desk fell despite posting positive earnings for the third quarter.
Tesla hits $1 trillion market cap
Shares of Elon Musk’s Tesla jumped 6% on Friday as the stock continued its post-election rally.
Friday’s gains took Tesla’s market cap past $1 trillion for the first time.
The company’s stock rose more than 27% this week after Trump secured his second presidency in the US. Musk’s close ties with Trump were seen as positive for the business.
Tesla’s CEO Musk was one of the prominent figures backing Trump for his second term as president of the US.
China announces stimulus package
China on Friday announced a stimulus package of $1.4 trillion to help tackle local government debts.
The week-long meeting of the National People’s Congress was concluded on Friday as the political body announced measures to boost local government’s growth.
Meanwhile, the University of Michigan’s consumer sentiment gauge came in at 73 in November in the US. The index rose to its highest level since April.
The reading was also better than expectations of 71 and was higher from 70.5 clocked in October.
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