Stocks Advance as Nvidia Closes at All-Time High: Markets Wrap
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Dow Jumps Over 400 Points To Start Thanksgiving Week
NEW YORK, NEW YORK - NOVEMBER 26: Traders work on the floor of the New York Stock Exchange during morning trading on November 26, 2024 in New York City. Stocks opened mixed amid the threat of new 25% tariffs on products from Mexico and Canada as well as an additional 10% on Chinese goods from President-elect Donald Trump. (Photo by Michael M. Santiago/Getty Images)
Rita Nazareth
6 min read
(Bloomberg) -- A rally in the world’s largest tech companies lifted stocks at the start of the first full trading week in 2025. The dollar trimmed losses as President-elect Donald Trump said his tariff plan won’t be scaled back.
While most shares in the S&P 500 fell, dip buying fueled gains in Wall Street’s most-influential group. A gauge of the “Magnificent Seven” megacaps climbed 2%. Nvidia Corp. hit a record high ahead of chief Jensen Huang’s speech. Banks climbed on deregulation optimism, with Michael Barr stepping down as the Federal Reserve’s vice chair for supervision. The news also fueled a steepening of the Treasury curve, with longer maturities underperforming. The yield on 30-year bonds hit the highest since late 2023.
Scott Rubner at Goldman Sachs Group Inc. sees signs of a short-term tactical bullish setup for US stocks, driven by institutional money flows and a lack of selling across trend-following systematic funds. At JPMorgan Chase & Co., Andrew Tyler said while risks to the fierce rally are mounting, a bearish downturn remains “extremely unlikely” amid strong economic growth.
“The recovery we’ve seen Friday and today shows just how strong the ‘buy the dip’ mentality still is,” said Mark Hackett at Nationwide. “Investors continue to lean heavily on tech. Looking ahead, 2025 won’t be a year for easy double-digit gains by solely investing in the S&P 500. Success in this market will require more discipline and creativity.”
The S&P 500 rose 0.6%. The Nasdaq 100 added 1.1%. The Dow Jones Industrial Average was little changed. American Airlines Group Inc. jumped on a trio of analyst upgrades. Citigroup Inc. also gained on a bullish call. Tencent Holdings Ltd. depositary receipts slid as the US added company to its Chinese military blacklist.
The yield on 10-year Treasuries rose two basis points to 4.62%. The Bloomberg Dollar Spot Index fell 0.6%. The loonie gained as Prime Minister Justin Trudeau quit after more than nine years leading Canada. Bitcoin topped $100,000. Oil halted a five-session rally.
Lori Calvasina at RBC Capital Markets says investor exuberance in the stock market is starting to “self-correct” as a measure of sentiment and positioning fell into the year end.
“While this doesn’t tell us that the recent period of malaise in the stock market is over, we do think this deterioration in sentiment is actually good news for the stock market longer term,” she wrote.
The S&P 500’s December pullback didn’t prevent clients from being net buyers in nine of 11 sectors last month, according to Chris Larkin at E*Trade from Morgan Stanley.
“While there may have been a defensive element to some of the buying in utilities and real estate, the push into the consumer discretionary sector suggested more of a ‘risk-on’ mindset — led by purchases of TSLA and AMZN,” he noted.
Traders are also gearing up for Friday’s jobs report, which is expected to show employers tempered hiring to wrap up a year of moderating yet still-healthy labor market. The data is unlikely to alter the view of Federal Reserve officials that they can slow the pace of rate cuts amid a durable economy and inflation that’s dissipating only gradually.
Fed Governor Lisa Cook said Monday that policymakers can proceed more cautiously amid a sturdy labor market and lingering inflation pressures.
US stocks are becoming rate sensitive again, with breadth turning narrow after the US 10-year Treasury yield rose above 4.5%, according to Morgan Stanley strategists led by Michael Wilson.
“In order to see the return of a ‘good is good’ backdrop where hotter economic data drives upside in stocks even amid higher rates, we likely need to see more convincing evidence that animal spirits are inflecting and translating into stronger economic activity,” they wrote.
Notwithstanding fewer likely rate cuts, Solita Marcelli at UBS Global Wealth Management, sees a favorable backdrop ahead — driven by a mixture of lower borrowing costs, resilient US activity, a broadening of US earnings growth, further AI monetization, and the potential for greater capital market activity under a second Trump administration.
“We expect the S&P 500 to hit 6,600 by end-2025 and suggest that under-allocated investors consider using any near-term turbulence to add to US stocks, including through structured strategies,” she noted. The gauge closed at 5,975.38 Monday.
Corporate Highlights:
Walt Disney Co. agreed to merge its Hulu + Live TV streaming service with the online sports-focused company FuboTV Inc., creating the second-biggest digital pay-TV provider.
Meta Platforms Inc. elected three new directors to its board, including Ultimate Fighting Championship Chief Executive Officer Dana White, one of the media industry’s most influential executives and a high-profile campaigner for US President-elect Donald Trump.
Advanced Micro Devices Inc., the second-biggest maker of computer processors, said its chips will be used by Dell Technologies Inc. for the first time in PCs sold to businesses.
Dell Technologies Inc. is re-branding its PCs in a manner reminiscent of Apple Inc.’s naming conventions in an effort by the computer maker to spur demand.
Qualcomm Inc. introduced new chips designed to power personal computers capable of running the latest artificial intelligence software yet cost as little as $600.
Nippon Steel Corp. and United States Steel Corp. jointly filed a pair of lawsuits in a last-ditch effort to preserve their planned merger, which was blocked last week by President Joe Biden.
Carvana Co. said it has reestablished an agreement with Ally Financial Inc. to sell the lender up to $4 billion in used-vehicle loan receivables over the next year, a move that counters one claim by short seller Hindenburg Research that the financier was pulling back on their relationship.
Key events this week:
Eurozone CPI, unemployment, Tuesday
US job openings, trade, ISM services, Tuesday
Fed’s Thomas Barkin speaks, Tuesday
Eurozone PPI, consumer confidence, Wednesday
US ADP employment, Fed minutes, consumer credit, Wednesday
Fed’s Christopher Waller speaks, Wednesday
China CPI, PPI, Thursday
Eurozone retail sales, Thursday
US state funeral and national day of mourning for former President Jimmy Carter is a federal holiday, Thursday
Fed’s Patrick Harker, Thomas Barkin, Jeff Schmid and Michelle Bowman speak, Thursday
Japan household spending, leading index, Friday
US jobs report, consumer sentiment, Friday
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.6% as of 4 p.m. New York time
The Nasdaq 100 rose 1.1%
The Dow Jones Industrial Average was little changed
The MSCI World Index rose 0.7%
Bloomberg Magnificent 7 Total Return Index rose 2%
The Russell 2000 Index was little changed
Currencies
The Bloomberg Dollar Spot Index fell 0.6%
The euro rose 0.8% to $1.0388
The British pound rose 0.8% to $1.2520
The Japanese yen fell 0.2% to 157.63 per dollar
Cryptocurrencies
Bitcoin rose 3.8% to $102,260.79
Ether rose 1.1% to $3,688.08
Bonds
The yield on 10-year Treasuries advanced two basis points to 4.62%
Germany’s 10-year yield advanced two basis points to 2.45%
Britain’s 10-year yield advanced two basis points to 4.61%
Commodities
West Texas Intermediate crude fell 0.7% to $73.44 a barrel
Spot gold fell 0.2% to $2,635.40 an ounce
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Andre Janse van Vuuren, Allegra Catelli, Julien Ponthus and Catherine Bosley.
