Dow Jones Industrial Average hits record high

Record High
Record High

The stock market achieved new heights on Friday amidst a shortened trading day that capped a robust month for equities. Both the S&P 500 and the Dow Jones Industrial Average reached record intraday and closing highs. The S&P 500 climbed 0.56% to 6,032.38, while the Dow added 188.59 points, or 0.42%, to end at 44,910.65.

The Nasdaq Composite rose 0.83% to close at 19,218.17. This upward momentum was largely driven by gains in semiconductor stocks.

Chip stocks received a significant boost on the news that the Biden administration might implement additional barriers on the sale of semiconductor equipment to China.

This sector rally led the S&P 500 into uncharted territory, with about three out of every five of its members closing in the green. November has been an exceptional month for the stock market. The Dow rose 1.4% this week, bringing its gain for November to 7.5%.

The S&P 500 and Nasdaq Composite each advanced 1.1% for the week, closing out the penultimate month of 2024 with increases of over 5% and 6%, respectively. The small-cap-focused Russell 2000 surged 10.8% this month, bolstered by a 1.2% gain this week. Ross Mayfield, investment strategist at Baird Private Wealth Management, remarked, “The prevailing takeaway from November is that what was true before the election has remained true after the election.

As we head into December, it’s really hard to fade this bull market, with all the things going right, the election in the rearview and a seasonal tailwind that still has some room to run.”

Stocks have been bolstered by expectations that interest rates will remain low, which enhances the present value of future earnings and spurs economic growth.

Dow Jones hits holiday trading high

Fed funds futures now indicate a 66% probability that the Federal Reserve will lower rates by 25 basis points at its policy meeting next month.

The stock market was closed on Thursday and observed an early closure at 1 p.m. ET on Friday due to the Thanksgiving holiday. Consequently, trading volumes on both the New York Stock Exchange and Nasdaq were less than two-thirds of the daily average over the past 30 days. There have been no stock market corrections—defined as a pullback of 10% or more—in 2024, noted Bespoke Investment Group.

Historically, the S&P 500 averages a correction once every 346 days. The market has demonstrated increased strength in recent years, with half of the yearly periods since 2000 devoid of such pullbacks. “The S&P 500 is up more than 26% in 2024, on track for its best year since 2021,” Bespoke reported.

Market analysts also weighed in on specific stocks. Wedbush Securities reassured investors that the Federal Trade Commission probe into Microsoft is likely to have minimal long-term impact. “For Microsoft, we believe this FTC suit is much more bark than bite,” said analyst Dan Ives.

“Trump’s incoming administration is expected to create a more favorable environment for Big Tech.”

Jefferies strategist Christopher Wood speculated that U.S. equities might reach their peak before Trump’s inauguration on January 20, 2025. “Financial markets can get very extreme at inflection points, and it has to be wondered whether such a point is approaching,” Wood wrote. Evercore ISI chartered market technician Rich Ross predicted that U.S. stocks would continue their upward trajectory, potentially pushing index futures to 6,300 by year’s end, a 5% increase from recent levels.

As the market heads into December, investors remain optimistic about continued gains, driven by positive economic indicators and supportive monetary policies.

Adria Woodman

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