Wall Street Hits Record Highs as Trump Victory Boosts Key Sectors; Inflation Data Looms

Wall Street kicked off a crucial week by extending gains from a surge sparked by Donald Trump’s election victory, but the market’s explosive rally began to show signs of moderation as attention turned to inflation data and Federal Reserve signals. The Dow Jones Industrial Average hit a milestone, closing above 44,000 points for the first time, and the S&P 500 reached an all-time high above 6,000 points. Key sectors—Consumer Goods, Financials, and Industrials—led the rise, bolstered by expectations of Trump’s pro-business, expansionary policies.

Despite Monday’s record highs, trading volume was low due to the Veterans Day holiday, hinting at caution among investors ahead of crucial data releases. The rally's pace slowed as inflation concerns re-entered focus. Wednesday’s upcoming consumer price index (CPI) data is expected to reveal whether the Trump-fueled surge is sustainable or if inflation pressures may temper expectations of a prolonged rally. Analysts worry that Trump’s protectionist policies, such as stricter trade and immigration measures, could drive up inflation over the long term, pressuring the Fed to keep interest rates high.

Meanwhile, AbbVie’s stock dropped 12% after the company announced that its schizophrenia treatment failed to meet its primary goals in two phase 2 trials. Similarly, Sapiens International’s stock plummeted 26% after it cut its annual revenue forecast and reported weaker-than-expected Q3 earnings.

Among stocks performing well, Tesla’s value jumped 9%, surpassing $1.1 trillion, as investors bet on CEO Elon Musk’s connections with Trump. Crypto stocks like Coinbase, MARA Holdings, and Riot Platforms surged 15% or more, while big banks, including Goldman Sachs and JPMorgan, rose about 2% on expectations of regulatory easing under Trump. Meanwhile, tech giants Microsoft, Amazon, and Meta each saw a slight dip of about 1%.

Cryptocurrency markets soared, with Bitcoin reaching a record high of $87,000, reflecting optimism about Trump's supportive stance on digital assets and his pledge to make the U.S. a "crypto capital." Crypto-related stocks surged alongside Bitcoin, reflecting heightened speculative activity, while small-cap stocks rose on anticipated tax cuts, particularly benefiting sectors less resilient to regulation.

Evercore ISI forecasted robust market gains, projecting the S&P 500 could reach 6,600 by mid-2025, driven by “animal spirits” sparked by the U.S. election results. Evercore emphasized that this isn’t a short-term spike but the start of a broader, sustained market rally.

The Fed faces the delicate task of balancing growth support with inflation management amid a robust economy, further complicated by upcoming inflation data and Fed Chair Jerome Powell’s scheduled speech on Thursday.

Data for Technical Analysis (1H) CFD US30 DJIA

Resistance : 44259.8, 44270.8, 44288.6

Support : 44224.2, 44213.2, 44195.4                        

1H Outlook

Source: TradingView                  

Buy/Long 1 If the support at the price range 44184.2 - 44224.2 is touched, but the support at 44224.2 cannot be broken, the TP may be set around 44263.4 and the SL around 44164.2, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 44259.8 - 44299.8, TP may be set around 44332.0 and SL around 44204.2, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 44259.8 - 44299.8 is touched, but the resistance at 44259.8 cannot be broken, the TP may be set around 44216.8 and the SL around 44319.8, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 44184.2 - 44224.2, TP may be set around 44146.5 and SL around 44279.8, or up to the risk appetite.       

Pivot Points Nov 12, 2024 01:39AM GMT