Wall Street’s best week yet of 2024 saw major indexes surge, fueled by election buzz and strong consumer sentiment data. Optimism around the new administration’s pro-growth policies propelled the S&P 500 to its record-breaking 50th high of the year, underscoring investor confidence in the economic outlook as markets rally in response to the election’s impact.
Tesla Reclaims Trillion-Dollar Valuation
Tesla was a standout performer this week, with its stock surging enough to reclaim a trillion-dollar valuation. After recent pullbacks, Friday saw a rotation into defensive sectors like utilities and consumer staples, which benefited from oversold conditions and took the lead by the week’s end.
Investor Appetite Surges with $20 Billion Inflow
Investor interest in U.S. equities has surged following the election, with $20 billion flowing into U.S. equity funds in a single day. This massive influx, particularly into small-cap stocks, suggests high expectations for pro-business policies from the incoming administration, which investors believe could provide a solid boost to these sectors.
The S&P 500 briefly touched the 6,000 level, a psychologically significant milestone that could drive even more investor interest. However, some analysts caution that the market may consolidate its gains before launching into a year-end rally.
Bond Market Stabilizes Amid Declining Treasury Yields
After a volatile week, the bond markets found stability as Treasury yields declined. The U.S. dollar also continued its recent winning streak, adding further strength to market sentiment. By the end of the week, the S&P 500 rose by +4.7%, the Nasdaq Composite jumped by +5.7%, and the Dow climbed +4.6%, reflecting a broad rally across the markets.
Weekly Performance Recap
For the week:
- S&P 500: +4.7%
- Nasdaq Composite: +5.7%
- Dow Jones: +4.6%
Friday’s Closing Levels:
| Index | Close | Change | % Change |
| Dow Jones | 43988.99 | +259.65 | +0.59% |
| S&P 500 | 5,995.54 | +22.44 | +0.38% |
| Nasdaq Comp | 19286.78 | +17.32 | +0.09% |
| US 10-Year | 4.304% | ||
| VIX | 14.94 | -0.26 | -1.71% |
Market Sentiment Buoyed by Election Results
It doesn’t take much to read the market right now—investors are clearly pleased with the election outcome. The rally gained momentum after Republicans secured the House, raising expectations for market-friendly policies under the new administration. With these developments, stocks have reached all-time highs and appear likely to continue climbing.
FOMO Rally and Lack of Pullback
While this rally seems promising, it has a distinct Fear of Missing Out (FOMO) feel. Ideally, I would have preferred a “sell on the news” scenario post-election to create a buying opportunity on a dip. However, despite the upward momentum, we haven’t seen any significant pullback since the August lows. The market trend is still firmly upward, with no apparent obstacles in sight.
Major Market Milestones Reached
The rally has pushed major indices to notable milestones: the S&P 500 has hit 6,000, the Dow reached 44,000, and the Nasdaq climbed above 21,000. These new highs raise the question—will they attract profit-taking soon? It’s something investors will have to watch closely in the days ahead.
Source: CBOE, Bloomberg
This commentary is written by James Gomes, a seasoned finance industry veteran with extensive experience of over 30 years, including a substantial tenure at a reputable US bank exceeding 20 years.
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Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it.
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