U.S. stocks closed their best week in a year with record highs on Friday, with the S&P 500 reaching above the 6,000 level for the first time. The gains were driven by a combination of factors including Donald Trump winning the presidential election and the Federal Reserve cutting interest rates to stimulate the economy. Axon Enterprise, a company that sells Tasers and body cameras, saw a significant jump in its stock price after reporting better-than-expected profits. Expedia Group also rose after surpassing profit expectations, while Airbnb saw a decline following a disappointing earnings report.
However, not all companies fared well, as Airbnb’s decline weighed on the market along with Pinterest, which slid after lower revenue guidance. Despite these setbacks, the S&P 500 rose to 5,995.54, the Dow gained to 43,988.99, and the Nasdaq edged up to 19,286.78. In the bond market, longer-term Treasury yields eased, and consumer sentiment rose to its highest level in six months. The expectation for inflation in the coming year also decreased to the lowest level since 2020.
Treasury yields have been climbing due to the resilience of the U.S. economy and the Federal Reserve’s efforts to stimulate growth while keeping inflation in check. Trump’s policies, including tariffs, have also impacted yield forecasts as traders anticipate their effects on inflation and economic growth. In international markets, concerns about trade tensions and disruptions to the global economy have led to a decline in European indexes and Asian markets as investors await stimulus measures by Beijing to revive the Chinese economy.
Professional investors have urged caution amidst the uncertainty surrounding Trump’s policies and their impact on the global economy. U.S. banks and domestically focused companies have seen volatile movements, with Trump Media & Technology Group experiencing sharp swings in its stock price. As markets continue to react to political developments, investors are advised to closely monitor policy initiatives and their implications for investment opportunities.
