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US stocks rose after Trump appointed Scott Bessent as treasury secretary.
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Other post-election transactions reversed course as Bessent is seen as a potential counterweight to some of Trump’s plans.
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Bessent is a former hedge fund manager and a well-known global macro investor.
US stock prices recovered on Monday, with the Dow Jones Industrial Average hitting a new record high and major post-election trades reversing after President-elect Donald Trump made a high-profile Cabinet appointment.
Trump chose Scott Bessent as his Treasury secretary after the market closed Friday. Bessent is a hedge fund manager who worked for George Soros’ Soros Fund Management before launching his own fund, Key Square Capital Management, in 2015.
Investors have reacted positively to the news as Bessent is a well-known global macro investor and is believed to be likely to pursue pro-market policies in his leadership of the Ministry of Finance.
The choice was highly controversial among Trump’s inner circle, with Cantor Fitzgerald CEO Howard Lutnick and Apollo CEO Mark Rowan also vying for the job.
Bessent previously told his hedge fund clients in January that a Trump victory would result in economic plans that would usher in an “economic lollapalooza” through deregulation and lower taxes.
Some assets that had been built on expectations that Trump’s policies would be inflationary also reversed course after Bessent was appointed to the post.
Assets including gold, the US dollar and government bonds were sold off on Monday morning.
The dollar posted its biggest drop in two weeks after rallying against rival currencies after the election. Meanwhile, ten-year government bond yields fell sharply, falling eight basis points to 4.32%.
Yields after Trump’s victory had risen to their highest level in months, fueled by expectations that the Federal Reserve would be forced to keep interest rates high to counter the inflationary impact of Trump’s proposals for tariffs, tax cuts and mass deportations.
Markets see Bessent as a potential counterbalance to some of Trump’s more expansionary policies. In a note after the announcement, research firm Exante Data said it viewed Bessent’s choice as constructive in the context of uncertain policy outcomes under Trump, particularly the potential inflationary impact of tax cuts and rates.
“Scott has intellectual curiosity and a deep historical perspective, allowing him to operate in a highly uncertain new regime and serve as a strong, independent analytical voice at a time of increasing economic challenges for the U.S. and the global economy.”
“It is against this backdrop that thoughtful leadership at the U.S. Treasury Department is so critical. An approach that is realistic about what tax cuts are possible (including their impact on growth). An approach that is realistic about the amount of bond issues that the market issues.” take into account the relationship the US has with major bond buyers around the world,” the company added, noting that Bessent would likely seek to avoid any disruption to markets.
In the meantime, despite the shortened holiday week, it is a busy week for economic figures.
Investors will get the first unemployment claims, a third-quarter GDP revision and personal consumption expenditure data on Wednesday morning as the stock market closes on Thursday for Thanksgiving.
Economists expect initial jobless claims to reach 215,000 and GDP growth in the third quarter to reach 2.8%, while PCE inflation data is expected to be the same as last month at 0.2% on monthly basis.
Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Monday:
Here’s what else is going on:
In commodities, bonds and crypto:
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West Texas Intermediate crude fell 1.75% to $69.99 a barrel. Brent crude, the international benchmark, fell 1.56% to $74.00 per barrel.
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Gold fell 1.84% to $2,662.20 an ounce.
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The yield on ten-year government bonds fell by 11 basis points to 4.30%.
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Bitcoin fell 0.55% to $97,475.
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