U.S. stocks soared to new records, marking their best week in a year as markets closed on Friday. The S&P 500 gained 0.4%, briefly crossing the 6,000 mark for the first time, while the Dow Jones Industrial Average rose by 259 points(0.6%), and the Nasdaq composite added 0.1%. These gains follow a powerful rally earlier in the week, spurred by Donald Trump’s election win and another interest rate cut by the Federal Reserve to stimulate economic growth.
Axon Enterprise Leads Market Gains
Axon Enterprise, known for its Tasers and police body cameras, led the market with an impressive 28.7% surge after reporting better-than-expected quarterly profits and raising its annual revenue forecast to $2.07 billion, marking a projected 32% growth.
Expedia Shines, Airbnb and Pinterest Struggle
Expedia Group also rose, climbing 3.8% after surpassing profit forecasts and reporting a 9% increase in booked room nights from the previous year. Meanwhile, Airbnb dropped 8.7% after a mixed third-quarter earnings report, disappointing investors with a lackluster fourth-quarter forecast. Pinterest also faced a 14% decline as its revenue guidance fell below expectations, despite exceeding Wall Street’s sales and profit targets.
Index Closing Totals
By the end of the day:
- S&P 500 rose 22.44 points to 5,995.54
- Dow Jones climbed 259.65 points to 43,988.99
- Nasdaq composite edged up 17.32 points to 19,286.78
Treasury Yields Ease as Consumer Sentiment Rises
In the bond market, the yield on the 10-year Treasury dipped from 4.33% to 4.30%, reflecting a softer stance as consumer sentiment rose for the fourth consecutive month to its highest level in six months. Inflation expectations also eased, with projections for the coming year hitting their lowest since 2020.
Resilient Economy and the Impact of Trump’s Policies
Treasury yields have risen largely due to the resilience of the U.S. economy. The Federal Reserve’s interest rate cuts aim to keep the job market strong, now that inflation is approaching the Fed’s 2% target. Trump’s advocacy for tariffs and policies that could heighten inflation and increase U.S. debt is also influencing yield movements, causing traders to moderate their expectations for future Fed rate cuts.
Global Stock Market Reactions and Trade Tensions
Trump’s tariff rhetoric has stirred concerns about trade tensions globally, leading European indexes to close out a rough week in the red. Markets in Hong Kong and Shanghai also declined as investors awaited new economic measures from Beijing. Following a legislative meeting, officials announced a 6 trillion yuan ($839 billion) plan to help local governments refinance pandemic-era debt and tackle the real estate crisis.
Investor Caution Amid Potential Policy Shifts
Financial markets have been volatile as investors speculate on how Trump’s policies—like higher tariffs, lower tax rates, and lighter regulations—will impact the global economy. Analysts, however, are advising caution as it remains unclear which proposals will materialize into policies.
“Our experience is that such narrow reactions have not historically made for durable investment opportunities,” Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, commented. “We favor pausing to look more closely at the likely main policy initiatives.”
U.S. Bank and Domestic Stock Volatility
Some of the biggest moves have been in U.S. banks and domestically focused stocks, emblematic of the so-called “Trump trade.” Trump Media & Technology Group, the company associated with the president-elect, surged 15.2% on Friday, recouping early-week losses with another sharp upswing.
