Stock Market Update

[BRIEFING.COM] The stock market started this holiday-shortened week on an upbeat note, responding favorably to President-elect Trump’s nomination of Scott Bessent for Treasury Secretary. The Dow Jones Industrial Average (+1.0%), Russell 2000 (+1.5%), and S&P Mid Cap 400 (+1.5%) logged decent gains while the S&P 500 (+0.3%) and Nasdaq Composite (+0.3%) trailed their peers. 

The relative underperformance of the S&P 500 and Nasdaq Composite reflected some rotation out of influential names that are sitting on huge gains since the start of the year. NVIDIA (NVDA 136.02, -5.93, -4.2%), which is still 174.7% higher this year, and Tesla (TSLA 338.59, -13.97, -4.0%), which is up 36.3% in 2024, were among the key players in that regard. 

Mr. Trump's pick to lead the Department of the Treasury is perceived as "market-friendly" due to his background as a hedge fund manager, which fueled the overall upside bias in the equity market. According to The Wall Street Journal, Bessent has expressed his priority to advance the Trump administration tax-cut proposals. 

The bond market also rallied due to optimism that Mr. Bessent, while focusing on tax cuts, will also focus on reducing the national debt, cutting the budget deficit to 3% of GDP, and advocating for a more gradual approach to tariffs in order to prevent runaway inflation.

The 10-yr yield dropped 15 basis points to 4.27% and the 2-yr yield dropped ten basis points to 4.27%. Also, the U.S. Treasury kicked off this week's note auction slate with a stellar $69 billion 2-yr note offering. 

The everything rally in the stock market left nine of the S&P 500 sectors higher led by real estate (+1.3%), which reacted to the drop in rates. The consumer discretionary sector was the next best performer, gaining 1.0%.

The energy sector was the weakest performer, dropped 2.0% as oil prices slid following news that Israel and Hezbollah could be nearing a ceasefire agreement. WTI crude futures settled 3.3% lower at $68.93/bbl.

There was no US economic data of note. 

• Nasdaq Composite: +26.9%
• S&P 500: +25.5%
• S&P Midcap 400: +21.9%
• Russell 2000: +20.5%
• Dow Jones Industrial Average: +18.7%

Looking ahead, Tuesday's economic calendar features:

• 9:00 ET: September FHFA Housing Price Index (prior 0.3%) and September S&P Case-Shiller Home Price Index (Briefing.com consensus 4.7%; prior 5.2%)
• 10:00 ET: November Consumer Confidence (Briefing.com consensus 113.0; prior 108.7) and October New Home Sales (Briefing.com consensus 718,000; prior 738,000)