By Chuck Mikolajczak
NEW YORK (Reuters) – The stock market briefly crossed the 6,000 mark and closed with its largest weekly percentage gain in a year. This surge was driven by Donald Trump’s election victory and the potential for a Republican Party sweep in Congress, which raised expectations for favorable business policies.
Stocks were also boosted this week by the Federal Reserve’s anticipated interest rate cut of 25 basis points on Thursday.
The S&P 500 and the Dow Industrials saw their best weekly percentage increase since early November 2023, while the Nasdaq had its best week in two months and second-best week of 2024.
Investors were closely watching for a potential “Red Sweep” as Republicans were poised to maintain their slim lead in the House of Representatives, having already secured control of the Senate. This outcome would facilitate Trump’s ability to implement his legislative agenda.
Expectations of reduced corporate taxes and deregulation propelled the Nasdaq to record closing highs for three consecutive sessions, while the S&P achieved its 50th record close of the year.
“The market is significantly up this week due to numerous positive developments. Whether we close at 6,005 or 5,995, the specific number is less important than the overall positive trend,” said Mike Dickson, head of research and quantitative strategies at Horizon Investments in Charlotte, North Carolina.
The Dow rose 259.65 points, or 0.59%, to 43,988.99, the S&P 500 gained 22.44 points, or 0.38%, to 5,995.54, and the Nasdaq increased by 17.32 points, or 0.09%, to 19,286.78.
For the week, the S&P 500 advanced by 4.66%, the Nasdaq rose by 5.74%, and the Dow climbed by 4.61%.
The Dow surpassed 44,000 for the first time, partially driven by a late boost from Salesforce, which rose by 3.59% following reports of its plans to hire 1,000 employees to promote its artificial intelligence Agentforce Tool.
The S&P 500 and Nasdaq both notched their fourth consecutive session of gains.
Rate-sensitive sectors like real estate and utilities led the performance among the 11 major S&P 500 groups as Treasury yields declined for the second straight day after a sharp increase post-election.
Despite concerns about the incoming administration’s proposed tariffs potentially reigniting inflation, the benchmark remained near a four-month high, and market expectations for the pace of Fed rate cuts in 2025 have moderated.
The small-cap index also surged, posting an 8.51% gain for the week, marking its largest weekly percentage increase since April 2020. Domestically focused stocks are expected to benefit from looser regulations, lower taxes, and reduced exposure to import tariffs.
U.S. consumer sentiment reached a seven-month high in early November, with expectations for the future among households rising to the highest level in over three years, particularly among Republicans, according to the University of Michigan’s Consumer Sentiment Index.
Shares of Airbnb fell by 8.66% after the company missed third-quarter profit estimates, while Pinterest tumbled by 14% following a disappointing revenue forecast.
Chinese companies listed in the U.S. experienced losses as investors were unimpressed by the government’s latest fiscal support measures. JD.com dropped by 6.99%, and Alibaba lost 5.94%.
On the NYSE, advancing issues outnumbered decliners by a ratio of 1.7-to-1, while on the Nasdaq, the ratio was 1.21-to-1.
The S&P 500 reached 88 new 52-week highs and 10 new lows, while the Nasdaq Composite recorded 211 new highs and 108 new lows.
Trading volume on U.S. exchanges totaled 15.46 billion shares, compared to the 12.74 billion average over the last 20 trading days.