Stocks saw modest gains Thursday morning, continuing to build on the momentum following Donald Trump’s recent presidential victory. As Wall Street tracks a historic post-election rally, investors are also focused on the Federal Reserve's upcoming interest rate decision expected later in the day.
The S&P 500 climbed 0.4%, while the Nasdaq Composite rose 0.9%. The Dow Jones Industrial Average remained mostly flat. Early trading saw all three indexes reach new intraday highs as market optimism persisted.
Trump’s election win sparked a market surge, with the Dow gaining over 1,500 points and the S&P 500 posting its best-ever post-election day with a 2.53% increase. “The results are in, and the markets are now able to breathe a little easier, avoiding the prospect of a prolonged election process,” noted Scott Helfstein, Global X ETFs’ head of investment strategy. Helfstein emphasized that while political events can cause notable market volatility, long-term fundamentals ultimately prevail.
Financial Stocks Slip After Wednesday’s Surge
Financial stocks, which experienced a major boost on Wednesday, showed signs of cooling on Thursday. Shares of JPMorgan Chase (NYSE:JPM) declined by 2%, while American Express (NYSE:AXP) shares dipped 1.7%, contributing to the Dow’s slight downturn. On the other hand, major tech stocks moved higher, with Apple (NASDAQ:AAPL) and Nvidia both gaining more than 1%.
Market Eyes Fed Interest Rate Decision
Traders have their sights set on the Federal Reserve’s interest rate announcement later Thursday, along with the ensuing press conference by Chair Jerome Powell. According to the CME Group’s Fed Watch tool, there’s a 100% probability that the central bank will lower interest rates. The anticipated rate cut would be the second consecutive reduction, following September’s rate drop, which was the first since 2020.
Richard Flynn, managing director at Charles Schwab (NYSE:SCHW) UK, commented on the short-term effects of the Fed’s decision, noting that while current easing measures may provide immediate market clarity, the long-term impact will hinge on post-election developments and their implications for inflation and currency valuations.
Opening Gains and Historic Post-Election Rally
Thursday morning saw a slight uptick across major indexes, with the Dow, S&P 500, and Nasdaq Composite reaching new intraday highs shortly after markets opened.
Analysts are calling this election-driven rally historic. The S&P 500’s 2.5% surge on Wednesday was its 48th record close of the year and marked the largest post-election gain in its history, according to Deutsche Bank’s Jim Reid, head of global economics and thematic research. The rally has been fueled by expectations that Trump’s proposed economic agenda—centered around tax cuts, deregulation, and pro-domestic growth policies—could stimulate the economy and benefit riskier assets.
As of now, the S&P 500 has gained 24.3% year-to-date, reflecting optimism surrounding the future policy landscape.
Stocks to Watch: Key Movers in Premarket Trading
Several high-profile companies made notable moves in premarket trading Thursday:
- Lyft (NASDAQ:LYFT) surged over 23% after issuing a robust fourth-quarter forecast, projecting bookings of $4.28 billion to $4.35 billion, above analyst expectations of $4.23 billion.
- Arm Holdings (NASDAQ:ARM) declined by about 7% despite reporting better-than-expected earnings. The semiconductor firm announced adjusted earnings of 30 cents per share on revenue of $844 million, exceeding Wall Street forecasts of 26 cents per share on $808 million revenue.
- Wolfspeed saw its stock plummet by over 25% after posting disappointing revenue figures and lowering its outlook. The semiconductor maker forecast second-quarter revenue between $160 million and $200 million, below analysts’ projections of $215 million.
Economic Data: Productivity and Labor Costs Miss Expectations
In other economic news, the Bureau of Labor Statistics reported lower-than-expected productivity gains and higher labor costs for the third quarter. Nonfarm labor productivity, a measure of economic output per hour worked, increased by 2.2%, falling short of the anticipated 2.5% growth. Meanwhile, unit labor costs, which gauge hourly compensation relative to productivity, rose by 1.9%, significantly surpassing the forecasted 1.1%.
As markets continue to react to post-election optimism and await further guidance from the Fed, traders remain focused on how these developments may influence longer-term economic and financial stability.