Wall Street rally/ S&P 500 record high/ Scott Bessent Treasury pick/ retail earnings impact/ bitcoin near $100K/ NEW YORK/ Newslooks/ J. Mansour/ Morning Edition/ U.S. stocks are pushing toward record highs, with the S&P 500 and Dow Jones climbing amid optimism over Treasury yield declines and market reaction to Scott Bessent’s anticipated nomination as Treasury Secretary. Retailers like Bath & Body Works boosted investor sentiment with strong earnings, though Macy’s faced scrutiny after uncovering hidden expenses.
Stock Market Momentum: Quick Looks
- Market Gains: S&P 500 up 0.8%, Dow rises 459 points, Nasdaq climbs 1%.
- ‘Bessent Bounce’ Effect: Yields on 10-year Treasury drop to 4.30%, easing borrowing costs.
- Retail Highlights: Bath & Body Works surges 21% after strong earnings; Macy’s drops 3.8% on financial delays.
- Inflation Data: Upcoming report may shape Federal Reserve’s rate-cut plans for 2025.
- Crypto Surge: Bitcoin approaches the $100,000 milestone.
Stocks Climb as Markets React to ‘Bessent Bounce,’ Fed Expectations
Deep Look
Wall Street extended its rally Monday, with major indexes approaching record highs as easing Treasury yields and better-than-expected retail earnings bolstered investor confidence. The anticipated nomination of Scott Bessent as Treasury Secretary under President-elect Donald Trump added to optimism, helping address concerns about rising national debt and inflation.
Record-Breaking Potential
The S&P 500 rose 0.8%, nearing its all-time high set two weeks ago. Meanwhile, the Dow Jones Industrial Average jumped 459 points, surpassing Friday’s record, and the Nasdaq composite gained 1%, fueled by tech and retail stocks.
The rally is bolstered by easing Treasury yields, with the 10-year yield dropping to 4.30% from 4.41% on Friday. Lower yields reduce borrowing costs and make stocks more attractive compared to bonds.
‘Bessent Bounce’ and Market Sentiment
Markets responded with renewed bets on potential Federal Reserve rate cuts in 2025, reversing post-election hesitancy. Traders now anticipate more aggressive cuts to bolster the economy.
Inflation Data Looms
All eyes are on a key inflation report due Wednesday, expected to show a slight rise in the Fed’s preferred inflation metric to 2.8% from 2.7% in September. Higher inflation could limit the Fed’s flexibility to cut rates, though projections indicate inflation might cool to 2.4% by late 2025.
Retail Highlights
Retailers remained a focal point as investors assessed consumer resilience:
- Bath & Body Works: The retailer jumped 21% after beating quarterly profit estimates and raising full-year forecasts despite a volatile retail environment.
- Macy’s: Shares fell 3.8% after the company delayed full financial results to investigate hidden delivery expenses totaling $154 million.
The retail sector delivered mixed signals last week, with Walmart projecting a strong holiday season while Target warned of sluggish sales.
Cryptocurrency Surge
In the crypto market, bitcoin approached the $100,000 milestone, trading around $97,000 after briefly nearing six figures last week. This rally underscores growing investor interest in digital assets amid easing inflation fears.
Global Markets
European stocks posted modest gains, following mixed results across Asia. Optimism in U.S. markets helped buoy sentiment globally, even as inflation and geopolitical uncertainties weighed on investor confidence abroad.
Outlook
With markets rallying and inflation data on the horizon, investor sentiment hinges on upcoming Federal Reserve decisions and clarity on fiscal policies under Trump’s administration. For now, easing Treasury yields and resilient consumer spending keep Wall Street on track for record highs.
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