Stock Market Today: Stocks Extend Post-Election Rally as the Fed Cuts Interest Rates

The U.S. stock market continued its post-election rally on Thursday, November 7, 2024, as the Federal Reserve (Fed) announced another interest rate cut. The Standard & Poor’s 500 index climbed 0.7%, adding to its surge from the previous day following Donald Trump’s presidential victory. The Dow Jones industrial average edged down by less than a point, while the Nasdaq composite rallied 1.5% (Source: The Los Angeles Times, 2024).

The Fed’s decision to ease its main interest rate was well-anticipated by investors, causing few ripples in the market. The central bank began easing rates in September and indicated that more cuts were likely as it focuses more on keeping the job market humming after helping get inflation nearly down to its 2% target. However, the market’s muted response to the latest cut suggests a potential misalignment between market expectations and actual policy intentions, possibly due to the Fed’s lack of clear forward guidance and excessive data dependency (Source: Investopedia, 2024).



The Fed’s rate cut may disproportionately benefit sectors sensitive to interest rates, such as utilities and real estate. However, it could pressure banks and other financial institutions. Tech stocks, like Qualcomm and Nvidia, may also benefit from lower rates, as they often have high valuations and rely on cheap capital for growth. Among noteworthy stocks on the move, Qualcomm shares were up nearly 7% after the chipmaker reported quarterly earnings that topped Wall Street expectations and announced a $15 billion stock buyback (Source: Investopedia, 2024).



Trump’s trade policies, including proposed tariffs and renegotiations, have sparked uncertainty and volatility in the stock market. Multinational corporations (MNCs) with significant exposure to international trade are particularly affected. Companies like Boeing and Caterpillar, heavily reliant on exports, have seen their stock prices fluctuate due to trade policy developments. However, firms like Apple and Nike, with complex global supply chains, have also been impacted. The Fed’s interest rate cuts aim to mitigate these uncertainties and boost economic growth, but the effectiveness of this policy remains to be seen.

Investors anticipate Trump’s fiscal policies, such as tax cuts and infrastructure spending, to boost economic growth and corporate earnings, driving market trends. However, concerns remain about potential trade tensions and higher deficits. Additionally, Trump’s foreign policy, particularly his “America First” stance and proposed tariffs, could increase market risk and volatility. Market participants are adjusting their portfolios to account for geopolitical risks associated with Trump’s presidency by focusing on sectors and companies that are less exposed to international trade tensions and more resilient to potential regulatory changes (Source: The Los Angeles Times, 2024).

In conclusion, the stock market today extended its post-election rally as the Fed cut interest rates, with investors focusing on the central bank’s policy intentions and the potential impact of Trump’s trade and fiscal policies. While the market’s muted response to the latest rate cut suggests a potential misalignment between market expectations and actual policy intentions, investors remain optimistic about the potential benefits of lower interest rates and Trump’s fiscal policies. However, concerns about trade tensions and geopolitical risks persist, and market participants are adjusting their portfolios accordingly.