Stock Market Today: Indexes Hit New Highs as Post-Election Rally Continues
Market Overview: November 12, 2024
The stock market continued its impressive rally on Tuesday, November 12, 2024, as investors remain optimistic about the re-election of President Donald Trump and the potential benefits of his protectionist policies for the U.S. economy. All three major indexes closed at record highs, with the Dow Jones Industrial Average (DJI) breaking the 44,000 mark for the first time in history .
Major Index Performance
Dow Jones Industrial Average (DJI): The blue-chip index rose 0.7% or 304.14 points to close at 44,293.13, after touching an intraday high of 44,486.70 .
S&P 500: Wall Street’s benchmark gained 0.1% to finish at 6,001.35, marking its first close above the key psychological barrier of 6,000. The index reached an all-time high of 6,017.31 during intraday trading .
Nasdaq Composite: The tech-heavy index finished at a record high of 19,298.76, rising 0.1%. In intraday trading, it posted an all-time high of 19,366.07 .
Market Drivers and Economic Outlook
Several factors are contributing to the current market optimism:
1. Solid U.S. Economic Growth: The U.S. GDP grew at 1.6%, 3%, and 2.8% in the first three quarters of 2024, respectively. The Atlanta Fed GDPNow tracker estimates a 2.5% GDP growth for the fourth quarter, surpassing pre-pandemic levels .
2. Strong Corporate Earnings: As of November 8, 452 S&P 500 companies have reported their quarterly financial results. Total earnings are up 7.1% year-over-year on 5.5% higher revenues, with 73.5% beating EPS estimates and 61.5% beating revenue estimates .
3. Federal Reserve Rate Cuts: The Fed reduced the benchmark lending rate by 25 basis points in its November FOMC meeting, following a 50 basis-point cut in September. The current fed funds rate range is 4.50-4.75%, down from a 23-year high of 5.25-5.5% in mid-September .
Sector Performance and Notable Stocks
The Consumer Discretionary Select Sector SPDR (XLY) and Financials Select Sector SPDR (XLF) were among the top performers, advancing 2% and 1.4%, respectively. Conversely, the Real Estate Select Sector SPDR (XLRE) dropped 0.9% .
Tesla (TSLA) was a major gainer, with its stock price jumping 9%. The electric vehicle manufacturer continues to benefit from strong demand and expanding production capacity .
Upcoming Market Events
Investors are closely watching for the following events that could impact market performance:
1. Potential December Rate Cut: The CME FedWatch interest rate derivative tool currently shows a 70% probability of another 25 basis-point rate cut in December .
2. President-Elect Trump’s Economic Policies: Market participants are eagerly awaiting more details on Trump’s second-term economic policies, particularly regarding tariffs and corporate tax rates .
3. Ongoing Earnings Reports: With the earnings season still in progress, investors will continue to monitor corporate financial results and guidance for insights into economic health and future market trends.
Market Sentiment and Volatility
The fear-gauge CBOE Volatility Index (VIX) was down 0.2% to 14.97, indicating relatively low market anxiety. Trading volume remained robust, with 15.4 billion shares traded on Monday, higher than the last 20-session average of 12.8 billion .
As the market continues to reach new highs, investors should remain vigilant and diversified in their portfolios. While the current trends are positive, it’s essential to consider potential risks such as geopolitical tensions, inflation concerns, and any unexpected shifts in economic policy.
Why is the market up today? The stock market’s strong performance can be attributed to a combination of factors, including optimism surrounding President Trump’s re-election, solid economic growth, strong corporate earnings, and the Federal Reserve’s accommodative monetary policy. These elements have created a favorable environment for risk assets, driving major indexes to record highs.
As we move forward, market participants will be keenly watching for any developments that could impact this bullish trend, particularly focusing on upcoming economic data releases, further details on Trump’s second-term policies, and the Federal Reserve’s future rate decisions.
