Wall Street hovers near record high as Trump-fueled rally continues

By Lisa Pauline Mattackal and Purvi Agarwal

(Reuters) -Wall Street’s main indexes were near record highs on Monday (NASDAQ:), holding on to post-election gains, ahead of the next batch of economic data that could decide whether the equity rally can sustain itself.

Several stocks that gained following the U.S. election results continued their upward trajectory. Tesla (NASDAQ:) jumped 7.4% after touching $1 trillion in market value on Friday for the first time since 2022.

The EV maker gave a boost to consumer discretionary shares, with the sector at a record high.

The small-cap jumped 1.6% to its highest level since last November and was near a record high, with the stocks expected to be a key beneficiary of President-elect Donald Trump’s proposed tax cuts and on expectations of an easier regulatory environment.

“Assuming that Trump and Congress can deliver on even a few promised tax reforms and de-regulations, and if the economy stays healthy, it’s reasonable to expect current trends to continue,” said Mark Malek, chief information officer at Siebert.

The Nasdaq, however, retreated after hitting a record high as megacap stocks weighed. Information technology shares fell 1% and chip stocks were down 3%, led by a 21% slump in Monolithic Power (NASDAQ:) Systems.

“Last week’s moves were substantial, so expect some volatility and sideways trading until the new lawmakers are seated and policies become clear,” Malek added.

The rose 374.85 points, or 0.85%, to 44,363.84, the gained 14.29 points, or 0.24%, to 6,009.83, and the lost 12.66 points, or 0.07%, to 19,274.12.

Financial stocks jumped 1.85% to a record high, with banks giving the biggest boost to the Dow.

The three main Wall Street indexes soared in the previous week as Trump retook the White House. The benchmark S&P 500 briefly crossed the 6,000 mark on Friday and the Dow touched 44,000 points for the first time.

Crypto stocks rallied as bitcoin soared past $84,000 on Monday. Coinbase Global (NASDAQ:) jumped 17% and bitcoin miners MARA Holdings and Riot Platforms (NASDAQ:) gained 21% and 16.2%, respectively.

Focus will now be on consumer price inflation data, due Wednesday, and a raft of other key data this week for signals on the economy and monetary policy outlook.

The U.S. Federal Reserve cut interest rates by 25 basis points as expected last week, and investors see a 65.1% chance of the same move at its December meeting, according to CME FedWatch, though they have begun dialing back expectations for easing next year.

“With policymakers already so cautious about the risk of renewed price pressures, particularly amid the continued strength of the U.S. economy, the Fed will need to tread a cautious path,” said Seema Shah, chief global strategist at Principal Asset Management.

Advancing issues outnumbered decliners for a 1.7-to-1 ratio on the NYSE and a 1.47-to-1 ratio on the Nasdaq.

The S&P 500 posted 115 new 52-week highs and seven new lows, while the Nasdaq Composite recorded 316 new highs and 61 new lows.