Wall St rides post-election rally to close near record

• US stocks closed near record highs, driven by expectations of tax cuts from President-elect Donald Trump.
• Tesla rose 7.4%, boosting consumer discretionary shares, while the Dow and S&P 500 also gained.
• The focus now shifts to upcoming consumer price inflation data and other key economic indicators this week.

US stocks have closed near a record high, amid investor expectations that incoming US President Donald Trump plans tax cuts.

Wall Street’s main indexes closed near record highs on Monday, holding on to post-election gains, ahead of the next batch of economic data that could decide whether the equity rally can sustain itself.

Several stocks that gained following the US election results continued their upward trajectory. Tesla jumped 7.4%, after touching US$1 trillion in market value on Friday for the first time since 2022.

The electric vehicle (EV) maker gave a boost to consumer discretionary shares, with the sector at a record high. The small-cap Russell 2000 index jumped 1.6% to its highest level since November 2021 and was near a record high, with the stocks expected to be a key beneficiary of Trump’s proposed tax cuts and on expectations of an easier regulatory environment.

“Assuming that Trump and Congress can deliver on even a few promised tax reforms and deregulations, and if the economy stays healthy, it’s reasonable to expect current trends to continue,” said Mark Malek, chief information officer at Siebert.

The Nasdaq, however, retreated after hitting a record high as mega-cap stocks weighed.

Information technology shares fell 1% and chip stocks were down 3%, led by a 21% slump in Monolithic Power Systems.

“Last week’s moves were substantial, so expect some volatility and sideways trading until the new lawmakers are seated and policies become clear,” Malek added.

The Dow Jones Industrial Average rose 374.85 points, or 0.85%, to 44,363.84, the S&P 500 gained 14.29 points, or 0.24%, to 6,009.83, and the Nasdaq Composite lost 12.66 points, or 0.07%, to 19,274.12. Financial stocks jumped 1.85% to a record high, with banks giving the biggest boost to the Dow.

The three main Wall Street indexes soared in the previous week as Trump retook the White House. The benchmark S&P 500 briefly crossed the 6000 mark on Friday and the Dow touched 44,000 points for the first time. Crypto stocks rallied as bitcoin soared past US$84,000 on Monday. Coinbase Global jumped 17% and bitcoin miners Mara Holdings and Riot Platforms gained 21% and 16.2%, respectively.

The focus will now be on consumer price inflation data, due Wednesday, and a raft of other key data this week for signals on the economy and monetary policy outlook. As expected, the US Federal Reserve cut interest rates by 25 basis points last week, and investors see a 65.1% chance of the same move at its December meeting, according to CME FedWatch, though it has begun dialling back expectations for easing next year.

“With policy-makers already so cautious about the risk of renewed price pressures, particularly amid the continued strength of the US economy, the Fed will need to tread a cautious path,” said Seema Shah, chief global strategist at Principal Asset Management.

Advancing issues outnumbered decliners for a 1.7-to-1 ratio on the New York Stock Exchange and a 1.47-to-1 ratio on the Nasdaq. The S&P 500 posted 115 new 52-week highs and seven new lows, while the Nasdaq Composite recorded 316 new highs and 61 new lows.