US stocks continued their post-election rally on Friday, hitting new record highs, with the Dow Jones and S&P 500 posting their best weekly performance all year.
The blue-chip Dow Jones closed up 259.65 points, or 0.59%, to a record high of 43,988.99, and the broader Standard & Poor’s 500 index ended up 22.44 points, or 0.38%, to a record high of 5,995.54. The S&P 500 and Dow Jones are both up about 4.7% this week and are on track for their best week since November 2023.
The tech-laden Nasdaq ended the trading day up 17.32 points, or 0.09%, at 19,286.78, just below the new record high of 19,318.56 set during the day. The Nasdaq is up 5.7% this week.
Stocks rose sharply on Wednesday on hopes that President-elect Donald Trump would implement tax cuts and deregulation, analysts said. The increase continued Thursday after the Federal Reserve cut the short-term fed funds rate by a quarter of a percentage point and suggested more easing may be on the horizon, although the timing was uncertain. Stocks got another shot at good news on Friday after the University of Michigan consumer sentiment survey rose more than expected from 70.5 in October to 73.0 in November, and inflation expectations fell to the lowest level since December 2020.
“Sentiment rose in November while near-term inflation expectations fell, creating a potential Goldilocks scenario,” said Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina.
The rise in stock prices could provide a breather here and there, but many analysts expect more upside potential in the near term, especially if Republicans also win both chambers of Congress. The Republicans have already won a majority in the Senate. Votes are still being counted in the House of Representatives, but many believe that Republicans will retain their slim majority.
“With Republican support, we feel the fallout from the US elections can continue to be the catalyst driving markets,” said Mark Dowding, Chief Investment Officer of BlueBay at RBC Global Asset Management.
Trump’s victory also appeared to attract some sidelined money into the market, data show.
Automated investing platform Wealthfront said its new stock investment accounts were up 146% the day after the election compared to Election Day, and dollars deposited into stock investment accounts rose 286%. Transfers to automated investment accounts also rose 433% compared to Election Day, the report said.
According to Bank of America strategists, a total of $20 billion flowed into US stock funds the day after Trump’s decisive victory, marking the biggest single-day increase in five months.
