US stocks soar with Bessent's nomination; DJIA gains 500 points

U.S. stocks rose strongly Monday as investors cheered on President-elect Donald Trump nominating prominent investor Scott Bessent as Treasury Secretary. 

At 09:35 ET (14:35 GMT), the Dow Jones Industrial Average rose 500 points, or 1.1%, the S&P 500 index climbed 48 points, or 0.8%, and the NASDAQ Composite gained 180 points, or 1%.   Wall Street relieved by Bessent's nomination 

Bessent’s nomination helped clear a major point of uncertainty for markets, given that the Treasury Secretary role is one of the most influential in the cabinet for economic and trade regulations.

Bessent is a career investor who has called for tax reforms and deregulation for U.S. firms. He has also opposed overly strict trade tariffs, lessening the prospect of a costly trade war under a Trump administration. 

The dollar retreated after Bessent’s nomination, while Treasury yields - which have been a point of pressure on Wall Street - also fell sharply. 

Bessent’s nomination came amid a flurry of cabinet picks by Trump. The President-elect chose Fox News commentator Pete Hegseth as Defense Secretary, Howard Lutnick as Commerce Secretary and China hawk Mike Waltz as National Security Adviser. 

Broader market sentiment was also boosted by reports that Israel was close to reaching a ceasefire with military group Hezbollah in Lebanon, potentially marking some deescalation in the long-running Middle East conflict.  PCE data in focus 

The focus this week is squarely on upcoming PCE price index data, which is the Federal Reserve’s preferred inflation gauge.

Economists are expecting the PCE index to have risen 2.3% annually in October.

While the U.S. is due to release November data on both consumer and producer prices before the Fed’s next meeting on Dec. 17-18 this will be the final PCE report before then.

Recent stubborn inflation data has seen the Fed take a cautious stance towards further interest rate cuts, casting doubt over whether the central bank will cut interest rates in December. Bath & Body Works lifts full-year guidance 

In the corporate sector, retailers will be in the spotlight, with the US Thanksgiving holiday on Thursday and the following Black Friday marking the start of the holiday shopping season.

Bath & Body Works (NYSE:BBWI ) stock soared 20% after the personal care and home fragrance company raised its full-year guidance after reporting strong third-quarter results.

Macy’s (NYSE:M ), on the other hand, stock fell around 4% after the retail giant announced a delay to its third-quarter release, citing an accounting issue. Also, sales in its preliminary results disappointed, as steep promotions failed to attract customers who have turned selective on purchases.

The likes of Best Buy (NYSE:BBY ), Nordstrom (NYSE:JWN ) and Urban Outfitters (NASDAQ:URBN ) are all due to report this week.

Earnings results from two major retailers last week gave two very different perspectives. On Tuesday, Walmart (NYSE:WMT ) raised its annual sales and profit forecast for the third consecutive time, while Target (NYSE:TGT ) shares dropped sharply on Wednesday after it forecast holiday-quarter comparable sales and profit below estimates.

Investors are watching the extent to which inflation will weigh on buying habits, with consumer spending accounting for more than two-thirds of US economic activity.  Crude retreats on ceasefire hopes  

Crude prices retreated Monday, handing back some of last week’s hefty gains, on increasing hopes for a ceasefire in the troubled Middle East, an oil-rich region.

By 09:35 ET, the US crude futures (WTI) dropped 1.7% to $70.00 a barrel, while the Brent contract fell 1.6% to $73.44 a barrel.

Israel and Hezbollah were close to signing a ceasefire agreement to end hostilities in Lebanon, Axios reported on Sunday, citing Israeli and US officials. 

Israel daily The Times of Israel also reported that Prime Minister Benjamin Netanyahu was holding high-level talks over the deal, which was brokered by US officials. 

The prospect of an Israel-Hezbollah ceasefire points to lessening tensions in the Middle East, presenting a lower risk premium for oil. 

Both contracts gained around 6% last week, notching their biggest weekly gains since late September to reach their highest settlement levels since Nov. 7.

(Ambar Warrick contributed to this article.)

 

Source: Investing.com