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Financial markets adjusted rapidly to the Republican sweep on Election Day. Equity markets continued to race higher, with small-cap stocks and financials leading the move. The S&P 500 Index crossed 6,000 for the first time on Friday.1
The immediate response in the bond market was less favorable, as higher inflation expectations weighed on valuations. Bond prices recovered by the end of the week but interest rate volatility is likely to remain elevated until the Trump administration policy priorities come into greater focus. Almost lost in the election news was the Federal Reserve lowering interest rates by 25 basis points on Thursday.2
This week’s economic calendar is highlighted by another round of inflation data — the Consumer Price Index (CPI) on Wednesday and Producer Price Index (PPI) on Thursday.3 Friday’s Retail Sales report will provide another data point on the state of the U.S. consumer.4
Sources:
1CNBC – Dow tops 44,000 for first time, S&P 500 closes at record high to cap election week rally: Live updates; 11/8/24
2Board of Governors of the Federal Reserve System – Federal Reserve issues FOMC statement; 11/7/24
3,4MarketWatch – U.S. Economic Calendar; as of 11/11/24
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