Wall St rises; small-caps at record high after Trump nominates Bessent

By Johann M Cherian and Purvi Agarwal

(Reuters) -Wall Street's main indexes climbed on Monday, with the small-cap Russell 2000 index hitting an all-time high after Scott Bessent's nomination as Treasury secretary boosted sentiment and focus turned to ongoing discussions for a Middle East ceasefire.

President-elect Donald Trump ended weeks of speculation when he named his choice late on Friday, with some investment strategists saying Bessent could take measures to restrain further government borrowing, even as he follows through on fiscal and trade campaign pledges.

Markets also focused on talks of a ceasefire deal between Israel and Lebanon. Oil prices slid, dragging the Energy index lower 1.5%.

At 12:12 p.m. the Dow Jones Industrial Average rose 319.86 points, or 0.72%, to 44,616.37, the S&P 500 gained 12.27 points, or 0.21%, to 5,981.61 and the Nasdaq Composite gained 40.07 points, or 0.21%, to 19,043.72.

The small-cap index hit an all-time high of 2,466.48 and was last up 2%, eclipsing the high it touched three years ago, as Treasury yields declined sharply, with the 30-year bond leading losses across the board.

"We're definitely seeing a broadening out of leadership in the market," said Adam Sarhan, chief executive of 50 Park Investments in New York.

"Areas that were lagging for most of this year are beginning to outperform, such as the small-cap and the mid-cap stocks, not just due to Trump, but also due to the Federal Reserve cutting rates.

Expectations that Trump, along with a Republican Congress, can make good on his promise of business-friendly policies have been the latest tailwinds for small-cap companies. They have been in the spotlight since the U.S. Federal Reserve commenced its monetary policy easing cycle in September.

Lower yields helped the rate-sensitive Real Estate sector rise 1.1%, while the Housing index advanced 4.8%, trading near a record high.

The Dow and the S&P 500 touched intraday record high levels on the day. The benchmark index has jumped more than 4% since Nov. 4, while the Russell 2000 index surged more than 8% in the same period.

Barclays (LON:BARC ) raised its full-year 2025 forecast for the S&P 500, while Deutsche Bank (ETR:DBKGn ) set its target at 7,000 points by 2025-end.

However, concerns remain that inflationary pressures could spike and slow the pace of the Fed's policy easing.

Investors have recently swung between expectations of a pause versus a further cut in interest rates at the Fed's December meeting. The CME Group's (NASDAQ:CME ) FedWatch Tool shows a 56.2% probability the central bank will deliver another 25 basis point cut.

Consumer Discretionary stocks led sectoral gains, aided by Amazon.com (NASDAQ:AMZN )'s 1.8% rise.

The Personal Consumption Expenditure report, the central bank's preferred inflation gauge, will be on investors' radar later this Thanksgiving week.

Macy's (NYSE:M ) fell 3% after the department-store operator delayed the publication of its third-quarter results due to an accounting issue.

Bath & Body Works (NYSE:BBWI ) raised its forecast for full-year adjusted profit, sending the retailer's shares up 15.5%.



Advancing issues outnumbered decliners by a 3.23-to-1 ratio on the NYSE, and by a 2.8-to-1 ratio on the Nasdaq.

The S&P 500 posted 100 new 52-week highs and no new lows, while the Nasdaq Composite recorded 328 new highs and 44 new lows.

Source: Investing.com