The stock market rallied on Friday, with the Dow Jones Industrial Average surging more than 300 points and the S&P 500 posting its best week since the period following Donald Trump’s election in November. The Dow added 334.70 points, or 0.78%, to end at 43,487.83, while the S&P 500 gained 1% to 5,996.66 and the Nasdaq Composite advanced 1.51% to 19,630.20. Big tech stocks were among the top performers, with shares of Microsoft popping 3%, Intel jumping 3.1%, and Apple adding more than 1%.
For the week, the Dow and S&P 500 advanced 3.7% and 2.9%, respectively, marking their biggest weekly advance since the election week of November. The Nasdaq climbed 2.5% week-to-date for its best one-week performance since early December. The gains come on the heels of back-to-back reports showing inflationary pressures softening somewhat, with the Consumer Price Index rising less than expected year-on-year and the producer price index also showing a decline for December.
The yield on the 10-year Treasury note pulled back sharply as hopes for multiple rate cuts this year rose. Barclays strategist Emmanuel Cau noted in a Friday report that the better-than-expected economic data earlier this week has helped “revive the goldilocks narrative for equities, and likely prompted some re-risking.” Strong earnings from major banks also boosted stocks this week, as they tried to shake off December doldrums that carried over into the start of 2025. Shares of major banks were each roughly 12% higher on the week, while regional banks added 8% in the period.
big tech stocks drive market rally
Investors are also looking ahead to next week, as Donald Trump is set to be inaugurated as president for the second time. Stocks rallied right after his November electoral victory, as investors bet on deregulation and lower taxes.
Chris Senyek, chief investment strategist at Wolfe Research, believes the financial sector stands to benefit the most from policies under the Trump administration, citing rising business and consumer confidence, an extension of tax cuts, and deregulation as potential positive catalysts. In other market news, shares of social media companies pulled back Friday, reacting to the Supreme Court’s ruling to uphold the ban on TikTok. Snap tumbled more than 3% after the decision, and Meta Platforms fell more than 1%.
Meanwhile, stocks tied to crypto prices jumped amid reports that President-elect Donald Trump could release an executive order making crypto a national priority as soon as the first day of his new term. All sectors of the market are on pace to notch weekly gains, with materials, energy, and financials leading the way, up 6% or more for the week. The biggest underperformer is health care, which is up just 0.9% week-to-date.
As earnings season intensifies and the market awaits Trump’s inauguration, investors remain optimistic about the potential for continued economic growth and favorable policies for various sectors.
