U.S. stocks are continuing their upward trend on Monday, building on the gains from their best week of the year. The S&P 500 is up 0.3% in early trading, following a 4.7% surge last week driven by Donald Trump's presidential victory and the Federal Reserve's interest rate cut to support the economy. The Dow Jones Industrial Average has risen by 0.8%, or 338 points, as of 9:35 a.m. Eastern time, while the Nasdaq composite is 0.3% higher.
Tesla is a significant contributor to the S&P 500's rise, with an 8.4% increase. The company's stock has been on an upward trajectory, boosted by Elon Musk's close ties to Trump. The 'Trump trade' is influencing market dynamics, with investors speculating on industries that could thrive under a second Trump term. JPMorgan Chase's 1.6% increase is also bolstering market sentiment, as bank stocks benefit from expectations of economic growth, reduced regulation, and increased mergers and acquisitions.
Speculation about potential mergers, such as between insurers Cigna Group and Humana, is fueling market activity. While Cigna denied pursuing a deal with Humana, its stock rose by 6.4%, while Humana's declined by 4.2%. Stocks of companies focused on the U.S. economy are outperforming, with smaller stocks in the Russell 2000 index rallying by 1.1% due to perceived benefits from Trump's America First policies.
Trump Media & Technology Group, closely linked to Trump's popularity, saw a 4.1% increase as Trump transitions back to the White House. In the crypto market, bitcoin hit a record high of $82,493, reflecting Trump's support for cryptocurrencies and his vision to establish the U.S. as the crypto capital of the world.
Trump's policies are also impacting Treasury yields, with expectations of higher economic growth, inflation, and U.S. government debt. While bond market trading is closed on Veterans Day, Treasury yields have been rising since September, buoyed by the resilient U.S. economy. The Federal Reserve's interest rate cuts aim to sustain economic strength and maintain inflation near its 2% target.
Trump's election victory has led to global market fluctuations, particularly concerning increased tariffs and trade disruptions. European markets are rising, while South Korea's and Hong Kong's markets are experiencing declines. The evolving market landscape reflects the ongoing impact of Trump's policies on the global economy.
