Wall Street hovers at record highs; Trump-linked stocks extend gains

(In paragraph 11 please read "AI heavyweight Nvidia (NASDAQ:NVDA ) dropping nearly 2%." instead of "dripping")

By Lisa Pauline Mattackal, Noel Randewich

(Reuters) -Wall Street's main indexes were mixed and near record highs on Monday, with Tesla (NASDAQ:TSLA ) surging ahead of an upcoming batch of economic data that could influence the Federal Reserve's pace of interest rate cuts.

Several stocks added to gains they have notched since Republican Donald Trump won the election, as traders expect them to benefit from his return to the White House.

Tesla jumped almost 9% and reached a $1.1 trillion market value, fueled by bets the automaker will benefit from CEO Elon Musk's close ties to Trump.

Traders had exchanged over $56 billion worth of Tesla shares as of mid-afternoon, accounting for a quarter of all trading in S&P 500 companies, according to LSEG data.

The S&P 500 financial index jumped 1.5%, with banks helping lift the Dow Jones Industrial Average to a record high.

The small-cap Russell 2000 jumped 1.5% to its highest level since last November 2021 and was near a record high. 

Smaller companies are viewed as potential beneficiaries Trump's proposed tax cuts and expected looser regulations.

Microsoft (NASDAQ:MSFT ) , Amazon (NASDAQ:AMZN ) and Meta Platforms (NASDAQ:META ) each dipped almost 1%.

The S&P 500 has rallied almost 4% since Trump's victory last Tuesday, while the Nasdaq has gained almost 5%. 

"It's been a wild four days since the election and the market is taking a breath," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "But the trend is moving higher. I would not be surprised if the Trump rally bleeds into a Santa Claus rally."

The Nasdaq retreated after hitting a record high during the session. The S&P 500 information technology index fell 1.2% and the PHLX chip index lost 3.3%, with AI heavyweight Nvidia dropping nearly 2%.

The S&P 500 was up 0.09% at 6,000.68 points.

The Nasdaq was down 0.06% at 19,274.65 points, while the Dow Jones Industrial Average was up 0.76% at 44,322.01 points.

Crypto stocks rallied as bitcoin soared past a record $84,000. Coinbase Global (NASDAQ:COIN ) jumped 22% and bitcoin miners MARA Holdings and Riot Platforms (NASDAQ:RIOT ) gained 29% and 20%, respectively.

Investors are watching consumer price inflation data, due Wednesday, and a raft of other key data this week for signals on the economy and monetary policy outlook.

The U.S. Federal Reserve cut interest rates by 25 basis points last week, and interest rate futures imply traders see a 65% chance of another 25 basis point cut at the central bank's December meeting, according to CME FedWatch.

"With policymakers already so cautious about the risk of renewed price pressures, particularly amid the continued strength of the U.S. economy, the Fed will need to tread a cautious path," warned Seema Shah, chief global strategist at Principal Asset Management.



Advancing issues outnumbered falling ones within the S&P 500 by a 2.1-to-one ratio.

The S&P 500 posted 116 new highs and seven new lows; the Nasdaq recorded 344 new highs and 68 new lows.

Source: Investing.com