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The S&P 500 surged 4% this week, marking the very best week of gains because the November election.
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Declining rates of interest and a cooler-than-expected inflation report fueled renewed optimism.
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Investors are preparing for the approaching Trump administration, with inauguration day set for Monday.
US stocks surged on Friday, capping off the very best week for stocks because the November election.
The S&P 500, Nasdaq 100, and Dow Jones Industrial Average all gained over 3% for the week. Friday’s 1% gain for the main averages capped off the ultimate trading day of Joe Biden’s presidency.
President-elect Donald Trump will take office on Monday.
Stocks and bonds rallied after the December CPI inflation report got here in below economist estimates.
The information renewed hope amongst investors that the Federal Reserve would move forward with more rate of interest cuts this 12 months.
The ten-year yield was about flat on Friday but declined by about 20 basis points since hitting a 52-week high of 4.82% on Tuesday.
Here’s where US indexes stood on the 4:00 p.m. closing bell on Friday:
Based on the CME FedWatch Tool, the chances of two 25-basis point rate of interest cuts by the tip of the 12 months have jumped to 30%, up from 22% every week ago.
Rate cut bets were fueled further this week by Federal Reserve Governor Christopher Waller, who told CNBC on Thursday that rates of interest might be cut multiple times this 12 months, with the primary cut coming in the primary half.
“So long as the information is available in good on inflation or continues on that path, then I can definitely see rate cuts happening before perhaps the markets are pricing in,” Waller said.
Investors got the primary taste of fourth-quarter earnings this week, with the main US banks reporting blowout numbers. Shares of major banks including JPMorgan Chase, Citi, and Wells Fargo ended the week sharply higher, up about 10%.
The earnings mania will proceed next week, with major corporations including Netflix, United, Procter & Gamble, and Johnson & Johnson set to report results.
The stock market is closed on Monday, January 20, in observance of Martin Luther King Jr. Day.
Here’s what else happened today: