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    • Trump’s victory propels Wall Street to record highs; The Fed cuts interest rates
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    Trump’s victory propels Wall Street to record highs; The Fed cuts interest rates

    Umito Posted on

    Benzinga
    | Detroit Free Press

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    The election of President-elect Donald Trump as the 47th president of the United States sent Wall Street into a frenzy, pushing major stock indexes to a value of break records again.

    Investors are betting that potential Trump policies — such as lower corporate and personal taxes, coupled with deregulation of the financial sector — will boost growth for U.S. businesses. They may be underestimating the impact of rising deficits and tariffs on inflation.

    Among mega-cap companies, Tesla Inc. stood out, rising about 30% last week, providing a significant boost Elon Musk’s wealth the day after Trump’s victory.

    Small and mid-sized stocks outperformed large caps, driven by expectations that trade restrictions could favor domestic companies over global companies. The Russell 2000 index recorded its strongest week since April 2020, while regional banks reached levels never seen before. the crisis of March 2023.

    Cryptocurrencies were another big winner after the election, with bitcoin hitting new all-time highs as traders anticipate a favorable regulatory landscape for digital assets in a Trump’s second term.

    More: Stellantis cuts 400 more jobs, this time at Detroit logistics facility

    More: StockX CEO to step down at end of year, company co-founder to be next CEO

    The Fed further cuts spending; Powell’s professional future is uncertain

    Thursday, the The Federal Reserve has cut interest rates by 25 basis points to reach a target range of 4.5% to 4.75%, as planned. The move further strengthened investors’ appetite for risk, propelling the combined market valuation of the Magnificent Seven tech giants past the $17 trillion mark, setting a new record.

    Federal Reserve Chairman Jerome Powell has downplayed Trump’s impeachment threat, even though economists expect the new president will not extend Powell’s term beyond its expiration in 2026. Powell has struck a dovish tone, downplaying concerns over rising Treasury yields, which markets attribute to new inflation expectations.

    The Trump effect

    A Trump victory could dampen growth in the tech and electric vehicle sectors and slow the pace of progress in AI. Analysts warn that Trump’s policies could limit innovation, affecting industries that rely on technology. and investments focused on sustainability.

    Analysis of the S&P 500’s sector performance during Trump’s first term reveals that the technology and consumer discretionary sectors outperformed, while energy lagged. In the first three months after Trump’s election in 2016, financial stocks outperformed.

    Consumer confidence increases

    US consumer sentiment rose to a six-month high, beating forecasts, and inflation expectations fell to a four-year low, a report said. University of Michigan investigation released Friday.

    Benzinga is a financial information and data company headquartered in Detroit.

    Umito
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