Stock Market Recap: Why Was the Market Up Today? – November 26, 2024
The U.S. stock market ended on a high note on Tuesday, November 26, 2024, with major indices posting gains amid positive economic indicators and corporate news. This article provides a comprehensive stock market recap and explores why the market was up today.
Major Market Indexes Performance
The Dow Jones Industrial Average (DJI) led the charge, rising 1% or 440.06 points to close at a record high of 44,736.57. This marks the Dow’s 45th record close for the year, highlighting the strength of the current bull market.
The S&P 500 (SPX) advanced 0.3% or 18.03 points, finishing the day at 5,987.37. The benchmark index is now trading at 22.6 times expected earnings, above its 10-year average of about 18, reflecting investor optimism about future growth prospects.
The tech-heavy Nasdaq Composite also joined the rally, gaining 0.3% or 51.18 points to end at 19,054.84. This performance underscores the continued strength in the technology sector, despite some mixed results from individual stocks.
Sector Performance and Stock Highlights
Consumer discretionary and real estate stocks were the day’s top performers. The Consumer Discretionary Select Sector SPDR (XLY) gained 1%, while the Real Estate Select Sector SPDR (XLRE) rose 1.3%. Materials stocks also showed strength, with the Materials Select Sector SPDR (XLB) adding 1%.
Notable stock movements included:
– Meta Platforms, Inc. (META) and Apple Inc. (AAPL) both gained 1.1%
– NVIDIA Corporation (NVDA) declined 4.2%
– Netflix, Inc. (NFLX) fell 3.6%
The financial sector continues to outperform, up about 35% year-to-date, leading gains among S&P 500 sectors. Technology stocks follow closely, with a 33% increase for the year.
Market Catalysts and Upcoming Events
Several factors contributed to today’s positive market performance:
1. Treasury Secretary Nomination: President-elect Donald Trump’s nomination of Scott Bessent for Treasury Secretary was well-received by investors, who believe Bessent will guide the economy towards growth without sparking inflation.
2. Economic Data: Investors are looking forward to a series of important economic releases this week, including:
– Consumer confidence reading (Wednesday)
– October’s personal consumption expenditures price index (Wednesday)
– Federal Reserve’s November meeting minutes (Wednesday)
– Jobless claims report (Wednesday, due to Thanksgiving holiday)
3. Earnings Expectations: Analysts project earnings growth of 14.2% for the S&P 500 in 2025, up from 10.2% this year, according to LSEG data. This optimistic outlook is supporting current valuations.
Market Outlook and Expert Opinions
Despite the current rally, some experts urge caution. A Reuters poll of 48 equity strategists, analysts, brokers, and portfolio managers forecasts the S&P 500 to end 2025 at 6,500 points, representing an 8.5% increase from current levels.
Mary Ann Bartels, chief investment strategist at Sanctuary Wealth, expressed confidence in current valuations, citing expected growth in earnings and the economy. However, concerns remain about potential inflationary pressures and the impact of President-elect Trump’s proposed tariffs on major trading partners.
David Kostin, chief U.S. equity strategist at Goldman Sachs, predicts that the “Magnificent 7” group of high-performing stocks (including Nvidia and Microsoft) will continue to outperform next year, albeit “by a much smaller magnitude.”
Conclusion
The stock market’s strong performance today reflects ongoing investor optimism about economic growth, corporate earnings, and the potential for business-friendly policies under the incoming administration. However, investors should remain vigilant of potential headwinds, including inflationary pressures and geopolitical tensions.
As we approach the end of 2024, the market continues to show resilience, with major indices near record highs. The combination of anticipated interest rate cuts, strong corporate earnings, and potential regulatory changes sets the stage for an interesting year ahead in 2025.
Investors are advised to stay informed about upcoming economic data releases and to monitor how the new administration’s policies may impact various sectors and the overall market landscape.
