Markets News, November 6, 2024: Stocks Surge to Record Highs After Trump Wins Election; Tesla, Banks, Crypto Among Big Gainers
· InvestopediaStocks surged to record highs Wednesday after Republican Donald Trump won the U.S. presidential election, as market participants assessed the potential impact of having the former president back in the White House.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite hit record closing highs, after posting their biggest one-day gains since 2022, as investors responded to Trump's surprisingly decisive victory over his Democratic opponent, Vice President Kamala Harris. The Dow jumped 3.6%, or more than 1,500 points, while the S&P 500 and Nasdaq Composite added 2.5% and 3%, respectively. The small-cap Russell 2000 rose 5.8%, also the biggest gain in two years.
Tesla (TSLA) was among the big gainers Wednesday, with shares rising 15%. Tesla CEO Elon Musk has been a vocal supporter of Trump and campaigned alongside the former President in recent weeks. Among other large-cap technology stocks, AI investor favorite Nvidia (NVDA) and Amazon (AMZN) each gained about 4% and hit record highs, while Apple (AAPL) and Facebook parent Meta Platforms (META) fell slightly.
Shares of companies tied to cryptocurrency soared as bitcoin rose to record highs above $76,000 amid optimism that the asset class will get a boost from a Trump presidency. Cyrpto exchange Coinbase (COIN) jumped 31%, while MicroStrategy (MSTR), one of the world's biggest holders of bitcoin, was up 13% and bitcoin miner MARA Holdings (MARA) added 19%.
Banking stocks were also up across the board amid expectations that a Trump presidency could lead to regulatory changes and more deal-making. JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS) and Morgan Stanley (MS) were all up more than 10% and trading at record highs. The SPDR S&P Bank ETF (KBE) gained 12%
Among other noteworthy movers, shares of CVS Health (CVS) were up 11% after the pharmacy and insurance company released its earnings report. Super Micro Computer (SMCI) shares fell 18% after the struggling server maker provided preliminary results that missed expectations and said it’s unable to predict when it will file its delayed annual report.
Treasury yields, which have been rising in recent weeks as investors have scaled back their expectations for how aggressive the Federal Reserve will be in cutting interest rates, were at 4.44%, up from 4.29% yesterday and at their highest levels since early July. The Fed, which cut rates in September for the first time in four years, is expected to trim its benchmark lending rate by a quarter percentage point at the end of its policy meeting Thursday.
Gold futures were down nearly 3% to around $2,670 an ounce as the U.S. dollar strengthened in the wake of Trump's victory.
Biggest S&P 500 Movers on Wednesday
6 hr 48 min ago
Advancers
- Companies in the financial sector—especially those that issue credit cards—were among the top performers in the wake of Election Day. Shares of Discover Financial Services (DFS) soared 20.2%, notching the strongest gain of any S&P 500 stock. Discover previously announced plans to merge with Capital One (COF). Increased optimism about the deal receiving regulatory approval under a second Donald Trump administration likely helped boost shares of both companies, as Capital One stock popped 15.0% higher. Meanwhile, shares of Synchrony Financial (SYF), known for its retail-branded credit cards, surged 18.8%.
- Trimble (TRMB) shares added 17.9% after the GPS navigation firm reported better-than-expected third-quarter sales and profits. A revenue boost from the company's subscriptions and software services helped drive strong performance and contributed to an increase in full-year guidance. The company cited positive trends in client spending as concerns about the economy recede.
- Steel producers also enjoyed a post-election bump. Leading up to the election, analysts indicated that a Trump victory could lead to more protective policies toward the domestic steel industry. Shares of North Carolina-based steelmaker Nucor (NUE) jumped 16.0%.
Decliners
- Super Micro Computer (SMCI) shares logged the weakest performance in the S&P 500, plummeting 18.1% after the server and data storage provider said it is unable to specify a release date for its postponed 2024 annual report. Last week, accounting giant EY resigned from its auditing role with Supermicro. The uncertain outlook for the financial data release raised concerns about a possible delisting of the stock. The Nasdaq warned in a September letter that the reporting delay has left Supermicro out of compliance with the exchange's rules.
- Solar industry stocks lost some of their luster as media sources called the presidential election in favor of Trump. The former president has pledged that, upon returning to the White House, he intends to reverse Biden administration policies designed to promote the adoption of renewable energy solutions. Shares of solar technology provider Enphase Energy (ENPH) dropped 16.8% on Wednesday, while shares of solar module manufacturer First Solar (FSLR) sank 10.1%.
- Although food and beverage, personal care, and health industry supplier International Flavors & Fragrances (IFF) topped third-quarter revenue estimates, earnings per share came in below expectations, and its shares sank 11.6%.
The Outlook for Crypto and Bitcoin Under Trump
7 hr 26 min ago
The cryptocurrency industry expects better days ahead.
Specifically, Donald Trump's return to the White House is seen as a positive development for crypto regulation and the potential development of a strategic bitcoin stockpile. Those prospects lifted bitcoin (BTCUSD) today, with the leading cryptocurrency surging above $76,000 for the first time ever on Wednesday.
One of the biggest concerns for the crypto industry in recent years has been the Securities and Exchange Commission's approach to enforcement. The SEC has been criticized by crypto backers for perceived jurisdictional overstepping, bringing cases against crypto exchanges Binance, Coinbase, Kraken, and others.
During his speech at the Bitcoin 2024 conference in July, Trump promised to end the current administration's "anti-crypto crusade" and to replace SEC chair Gary Gensler on "day one." At the same event, he proposed creation of a bitcoin stockpile.
This election has also brought more crypto-friendly lawmakers into the Congress, making industry backers more optimistic. The results could mean rapid progress on bills related to stablecoins and clarification on when a crypto asset is a security, analysts at Bernstein said, according to a CoinDesk report.
They could also presage new crypto exchange-traded funds, such as the one recently proposed by crypto asset manager Bitwise for XRP.
Read the full article here.
Meantime, at the Federal Reserve...
7 hr 51 min ago
The Federal Reserve's policy committee on Wednesday began a two-day meeting that's expected to culminate with a decision to cut the benchmark lending rate by a quarter percentage point.
At just about any other time, the start of the Fed meeting would have been front and center on the minds of investors, but the election has grabbed the spotlight this week. Nonetheless, market attention will be squarely focused tomorrow afternoon on the Fed.
The decision is due at 2:00 p.m. ET, when the Fed will release its policy statement, which is eagerly awaited not only for the decision on rates but also for clues about what the Fed will do in the months ahead. Fed Chair Jerome Powell's will speak at a press conference a half hour later, and his remarks about the health of the economy and what it means for monetary policy will be closely scrutinized.
The central bank cut its key fed funds rate in September for the first time in four years, slicing it by half a percentage point. Officials indicated at the time that they expected to continue easing policy as inflation had subsided and the labor market was showing signs of weakness.
What Trump's Election Means for Mortgage Rates
8 hr 18 min ago
Treasury yields surged on Wednesday as market participants strapped in for a Trump presidency that's expected to boost inflation and interest rates.
Experts expect rising yields to lift mortgage rates in the coming weeks, though rates are expected to continue to trend downward over the long term.
Economists say Trump's tax and tariff policies could stoke inflation and deter the Fed from cutting interest rates as much as previously expected.
Read the full analysis here.
Gold Prices Tumble as Dollar Strengthens, Treasury Yields Rise
10 hr 15 min ago
Gold futures fell sharply Wednesday as news of Donald Trump's election victory sent bond yields, the U.S. dollar, and stocks strongly higher.
Gold futures dropped as much as 3% to as low as $2,673 per troy ounce. The precious metal now has shed about 5% of its value since peaking at its latest all-time high of $2,805 per troy ounce a week ago.
Gold has enjoyed a yearlong rally driven by rising central bank purchases, geopolitical tension, and declining interest rates. Expectations that those will persist have led many analysts to project further gains in the price of gold, with Goldman Sachs predicting gold will reach $3,000 per troy ounce by the end of 2025. That rally reversed amid concerns that Trump's proposed tariffs and immigration could reignite inflation.
Adam Turnquist, chief technical strategist for LPL Financial, said higher growth and inflation expectations drove bond yields and the dollar higher Wednesday. That makes gold, which offers no yields, less attractive to investors.
Read the full article here.
What Wall Street Thinks of Qualcomm Ahead of Earnings Report
11 hr 48 min ago
Qualcomm (QCOM) will report its fiscal fourth-quarter earnings after the market closes Wednesday, and analysts expect rising revenue and profits compared to the same time last year. However, they see revenue growth slowing over the next year amid slow smartphone and PC sales.
Analysts are somewhat bullish on the hardware and software manufacturer's stock, with the 12 analysts tracked by Visible Alpha split between four "buy," seven "hold," and one "sell" rating. Qualcomm's average price target of $198.08 shows that analysts think the stock has room to rise in the coming months.
In the fourth quarter, analysts expect Qualcomm's revenue to have risen nearly 15% from the same time last year to $9.9 billion, with profits projected to rise over 70% to $2.58 billion, according to estimates compiled by Visible Alpha.
Qualcomm stock was up nearly 4% Wednesday to around $172, about 19% above where it started the year but below the June high of $230.
CVS Shares Soar on Earnings, Leadership Change
12 hr 52 min ago
CVS Health (CVS) shares surged after the pharmacy chain and healthcare company posted better-than-expected results and new CEO David Joyner made leadership changes as he moves to shake up the struggling firm.
The company reported third quarter earnings per share of $1.09, with revenue rising 6.3% to $95.4 billion.
Revenue was boosted by the Pharmacy & Wellness division, which saw sales up 12% to $32.4 billion, aided by higher prescription volume, Sales at the Health Care Benefits segment advanced some 25% to $33 billion on growth in Medicare and commercial product lines.
The company said Health Services unit revenue dropped 5.9%, chiefly because of the loss of a large client and continued pharmacy client price improvements. Reuters in January reported that Tyson Foods (TSN) replaced CVS Health with Rightway to manage employee drug benefits.
Joyner took over as CEO last month. CVS in a separate statement said former UnitedHealth Group (UNH) executive Steve Nelson will become head of its Aetna insurance arm, and Prem Shah, the current chief pharmacy officer and president of the Pharmacy & Consumer Wellness division, will become group president
CVS shares were up 10% in recent trading, but are still down more than 20% since the start of the year.
Small-Cap Stocks Jump After Trump Win
13 hr 30 min ago
Small-cap stocks rose broadly Wednesday, outperforming the leading market indexes in the wake of Donald Trump’s victory in the presidential election.
The Russell 2000 (RUT) index of smaller companies was recently up more than 4%, outpacing gains seen in the S&P 500, Dow and Nasdaq. Several Russell companies posted large gains, with roughly a dozen recently up about 20% or more.
Both the Russell and benchmark S&P are up this year, but today’s move narrows the S&P’s outperformance. It also has the Russell at year-to-date highs — and levels last seen in late 2021.
The economic environment is generally seen as favorable to smaller companies, which are more sensitive to broader conditions. The Federal Reserve is also expected to cut rates again on Thursday; lower interest rates are generally understood to benefit companies that, like small caps, often carry more debt.
Some analysts have also speculated that a Republican win could mean lower corporate tax rates that might particularly benefit smaller firms.
Solar Stocks Tumble Following Trump's Election Win
14 hr 4 min ago
Several solar stocks including First Solar (FSLR) and Enphase Energy (ENPH) slumped in early trading Wednesday after the presidential election was called in favor of former President Donald Trump.
SunRun (RUN), Plug Power (PLUG), and SolarEdge Technologies (SEDG) shares also declined, with the Invesco Solar (TAN) exchange-traded fund (ETF) down nearly 11%.
In the 16-page campaign platform listed on Trump's website, positions on energy policies include increasing oil, natural gas, and coal production, while reversing Biden administration policies favoring renewable energy.
Trump's ability to reverse legislation like the Inflation Reduction Act, which studies have shown has accelerated the reduction of carbon dioxide emissions, will hinge on how Republicans fare in the remaining races yet to be decided in the House of Representatives. The party has secured a slight majority in the Senate, per the races already called by the Associated Press.
Super Micro Computer Levels to Watch as Stock Plunges Again
14 hr 55 min ago
Shares in Super Micro Computer (SMCI) tumbled in early trading Wednesday after the troubled server maker provided preliminary fiscal first-quarter results late yesterday that came in below Wall Street expectations and said it’s unable to predict when it will file its delayed 2024 annual report.
The stock broke down below a falling wedge pattern late last month on the highest weekly volume since late August, suggesting selling conviction behind the move.
Investors should watch crucial support levels on Super Micro Computer's chart around $23, $12, and $10, while monitoring a key resistance area near $30.
The stock was down 23% at $21.38 in recent trading.
Read the full technical analysis piece here.
What Donald Trump's Victory Means for the Economy
16 hr 10 min ago
Former president Donald Trump's victory in the 2024 presidential election sets the U.S. economy on a path of higher tariffs, lower taxes, and deregulation.
His victory has immediate and longer-term consequences for the U.S. economy. In the short run, the U.S. avoids the uncertainty and disruption that a delayed result could have caused.
In the longer run, Trump will have the chance to implement the vision laid out during his campaign, though his ability to do so will depend on which party controls the House of Representatives, and several of those races have yet to be called.
Read the full article here.
Tesla Jumps as Musk Seen Winning Under Trump Presidency
16 hr 32 min ago
Shares of Tesla (TSLA) were up 12% in recent premarket trading Wednesday on investor bets that the electric vehicle (EV) maker run by Elon Musk will be a major beneficiary of Donald Trump’s return to the presidency.
Tesla CEO Musk, an outspoken Trump backer, is expected to become a prominent adviser to the president.
Tesla's prospects under a Trump presidency are less clear cut, however. Trump isn’t a backer of clean energy, while Tesla has benefited from the Inflation Reduction Act of 2022, signed by President Joe Biden. Tesla also gained from 100% tariffs on Chinese EVs imposed by Biden that protected the EV maker from an onslaught of cars from the Asian nation—which is also a major market for the company.
Wedbush analyst Dan Ives, who has an “outperform” rating on the EV maker’s shares, said Sunday that the possibility of a trade war with China could weigh on the company. Ives did, however, note that a Trump presidency could mark a more welcoming environment for the company’s autonomy initiatives.
Trump Media Stock Surges in Premarket Trading
17 hr 48 min ago
Shares of Trump Media and Technology Group (DJT) jumped in premarket trading with former President Donald Trump set to win re-election to the White House.
The social-media company’s shares were recently trading at around $45, indicating an open more than 30% above Tuesday’s close. The move would extend a jump off September lows below $12 that has been marked by big swings in the company's value.
The company, owner of the Truth Social platform, last night reported its latest quarterly financial results, turning in third-quarter revenue of $1 million and a net loss of a bit more than $19 million. In its press release, executives cited a “legion of retail investors” who own the shares.
The company “continues to explore additional possibilities for growth such as potential mergers and acquisitions with companies that would benefit from Trump Media technology and branding, including in the realm of fintech,” CEO Devin Nunes said in a statement.
Trump is majority owner of the company's shares.
Major Indexes Poised to Skyrocket at Wednesday's Open
18 hr 20 min ago
Futures tied to the Dow Jones Industrial Average were up 3%.
S&P 500 futures were up 2.3%.
Nasdaq 100 futures were up 1.7%.