Market Wrap: Record Highs Again as Election Optimism Fuels Gains

The stock market continued its upward trajectory on November 13, 2024, driven by optimism surrounding the incoming administration and Congress. The S&P 500 broke new ground, closing above the 6,000 mark for the first time with a modest 0.1 percent gain. Meanwhile, the Nasdaq Composite also added 0.1 percent, the Dow Jones Industrial Average rose 0.7 percent, and the Russell 2000 led with a 1.4 percent surge.

Small-Cap Stocks Shine Amid Broader Optimism

Small-cap stocks outperformed, reflecting a continuation of trends from last week as investors maintained confidence in domestic growth and economic stability. The Russell 2000’s strong performance underscores a favorable view of businesses that are more reliant on the U.S. economy, as they stand to benefit from potential policy shifts under the new government.

Broader market participation was evident, with advancing stocks outpacing decliners by a 3-to-2 margin on both the NYSE and Nasdaq. The Invesco S&P 500 Equal Weight ETF rose 0.5 percent, illustrating strength across a wide range of sectors.

Sector Highlights

The consumer discretionary sector led the gains, rising 1.8 percent, bolstered by a standout performance from Tesla, which surged 9.0 percent to close at $350.00. Financials also delivered a strong showing, climbing 1.4 percent as the sector continued to benefit from favorable sentiment tied to the election results.

However, the information technology sector struggled, posting a 0.9 percent decline as mega caps and chipmakers faced selling pressure. This weakness in tech partially offset gains in other sectors, keeping the broader market's progress in check.

Economic Calendar in Focus

Although there was no major U.S. economic data released today, key reports scheduled for later this week will likely influence market momentum. The October Consumer Price Index (CPI) report on Wednesday, the Producer Price Index (PPI) on Thursday, and the October Retail Sales report on Friday are set to provide insights into inflation, production costs, and consumer spending trends.

The NFIB Small Business Optimism survey, scheduled for release on Tuesday morning, may offer an early glimpse into the sentiment of small businesses amid the evolving political and economic landscape.

Year-to-Date Performance Metrics

Year-to-date, the Nasdaq Composite leads with a 28.6 percent gain, followed by the S&P 500 at 25.8 percent. The S&P Midcap 400, Russell 2000, and Dow Jones Industrial Average have also posted strong gains of 19.6 percent, 20.1 percent, and 17.5 percent, respectively.

International and Commodity Markets

Overseas markets closed mostly higher, with Europe seeing notable gains across the DAX (+1.2 percent), FTSE (+0.7 percent), and CAC (+1.2 percent). In Asia, the Nikkei edged up 0.2 percent, while the Hang Seng slid 1.5 percent, and the Shanghai Composite added 0.5 percent.

Commodities were mixed, with crude oil declining $2.31 to settle at $68.07, while natural gas rose $0.25 to $2.92. Precious metals faced downward pressure, with gold dropping $75.20 to $2,618.50 and silver falling $0.78 to $30.65.

Outlook

The market’s upward momentum reflects sustained optimism in the wake of the election, with gains largely driven by sectors expected to benefit from anticipated policy changes. However, with key economic reports on the horizon and persistent weakness in technology stocks, investors remain cautious. The next several trading sessions will likely hinge on inflation data and broader economic indicators, which will offer greater clarity on the Federal Reserve’s potential path forward.

As the S&P 500 reaches this historic milestone, attention turns to whether the broader rally can maintain its momentum or if near-term challenges will lead to consolidation. Investors are poised to navigate a critical week for economic data and its implications for market performance.