Dow Jones Industrial Average and S&P 500 closed above critical milestones on Monday, buoyed by investor enthusiasm following the U.S. presidential election. “Trump trade,” reflecting optimism around President-elect Donald Trump’s expected tax cuts and deregulation policies, drove both stock and cryptocurrency markets higher.
Dow surged nearly 0.7%, closing above 44,000 for the first time in history, while the S&P 500 topped 6,000, marking an impressive rally for Wall Street. This latest rally builds on last week’s strong performance, with both indices reaching record highs.
Bitcoin Nears $87,000, Riding Crypto Optimism
Bitcoin has been a major beneficiary of the market’s post-election fervor, jumping nearly 10% to approach $87,000, a historic high. Cryptocurrency investors are hopeful that the Trump administration will adopt favorable policies toward digital currencies, with Trump promising a “strategic national bitcoin stockpile.” This has fueled a bullish trend across the cryptocurrency sector, pushing smaller digital assets like Dogecoin to new highs as well.
Crypto-related stocks followed suit, with Coinbase gaining over 20% and Robinhood seeing a 10% increase, reflecting the market’s anticipation of a more crypto-friendly administration.
Tesla Gains Amid Bullish Sentiment on EV Industry
Tesla’s stock continued its upward momentum, gaining 8% as investors remain optimistic about the company’s potential under Trump’s administration. Electric vehicle maker, which has now hit its highest closing price in over two years, is viewed as a likely beneficiary of policies supporting tech and automotive sectors. Wedbush analysts raised Tesla’s price target to $400, citing the election as a potential “game-changer” for the autonomous vehicle industry.
Tech Stocks Struggle as Nasdaq Lags Behind
In contrast to the broader market rally, the tech-heavy Nasdaq Composite lagged, barely closing above the flat line. Tech giants Nvidia, Apple, and Meta were notable underperformers, with Nvidia losing up to 2% during the session. The tech sector’s mixed performance could reflect uncertainty over how Trump’s policies might affect technology companies, which are sensitive to regulatory shifts and global trade policies.
Oil and Inflation Concerns Add Uncertainty
Oil prices fell by nearly 3% as the U.S. dollar strengthened, sparking concerns about Chinese demand for crude. The drop comes amid worries that deflationary pressures in China could dampen economic growth, despite ongoing stimulus efforts from the Chinese government. This dip in oil prices reflects broader market concerns about inflation data expected later this week, which could provide further clues about the Federal Reserve’s stance on interest rates.
Wall Street Watches Inflation Data and Fed Policy
Investors are awaiting October’s consumer inflation data, set to be released on Wednesday, which may influence the Federal Reserve’s future actions on interest rates. Last week, Fed Chair Jerome Powell remained silent on potential rate adjustments in light of Trump’s proposed tariffs and or policy shifts that could impact inflation. The market’s reaction to the upcoming inflation report could signal where the rally has more staying power or if caution will set in amid economic uncertainties.
As Wall Street navigates an evolving political landscape, the “Trump trade” shows no signs of slowing down, with investors eager to see how proposed policies could reshape the economy in months ahead.