The stock market rose to new heights on Friday amid a shortened trading day that capped a strong month for equities. The S&P 500 added 0.56% to 6,032.38, while the Dow Jones Industrial Average climbed 188.59 points, or 0.42%, to end at 44,910.65. Both the Dow and S&P 500 notched new intraday and closing highs.
Some of the upward momentum came from chip stocks, which popped after reports that the Biden administration was considering additional barriers on the sale of semiconductor equipment to China. Nvidia rallied more than 3%, while Advanced Micro Devices jumped more than 2%. The Philadelphia Semiconductor Index added 1.3%.
A fairly broad advance propelled the S&P 500 into uncharted territory, with about three out of every five S&P 500 members finishing the session in the green. Those moves came as traders looked to the end of a winning week and month. The Dow added 1.4% this week, bringing its gain for November to 7.5%.
The S&P 500 and Nasdaq Composite each advanced 1.1% on the week, ending 2024’s penultimate month higher by more than 5% and 6%, respectively. With those gains, the Dow and S&P 500 notched their best months of 2024. The small cap-focused Russell 2000 outperformed in November as investors saw the group benefiting from potential tax cuts.
The Russell 2000 surged 10.8% this month, helped by a gain of 1.2% this week. “The prevailing takeaway from November, to me, is that what was true before the election has remained true after the election,” said Ross Mayfield, investment strategist at Baird Private Wealth Management. “As we head into December, it’s really hard to fade this bull market here, with all the things going right, the election in the rearview and a seasonal tailwind that still has some room to run.”
Stocks have also been lifted late this year by expectations that interest rates will remain on a downward course, boosting the economy.
U.S. equities extend year-end rally
Fed funds futures are now pricing in around a 66% likelihood that the central bank will lower rates by 25 basis points at its policy meeting next month. The stock market was closed Thursday and wrapped early at 1 p.m. ET on Friday in observance of the Thanksgiving holiday.
Friday trading volume on both the New York Stock Exchange and Nasdaq was less than two-thirds of the past 30 days’ daily average. There hasn’t been a stock market correction, or a pullback of 10% or more, this year, according to Bespoke Investment Group. Since 1928, the S&P 500 has averaged a correction once every 346 days, almost once a year, the research firm said.
The market has been stronger in recent years, however, as half the yearly periods since 2000 haven’t had such a pullback. The S&P 500 is up more than 26% in 2024, on track for its best year since 2021. The FTC probe into Microsoft’s business practices shouldn’t be a cause for concern for investors, according to Wedbush Securities.
“For Microsoft, which has already been through its battle with the US Government, we believe this FTC suit is much more bark than bite,” analyst Dan Ives told clients. Ives maintained his outperform rating on the stock, noting a potential 30% upside, and suggested that a more friendly environment for Big Tech is likely under the Trump administration. U.S. stocks have soared this month under the promises of more market deregulation under a second Trump administration.
Jefferies strategist Christopher Wood speculated that the market might reach its peak before Trump’s inauguration on Jan. 20. “Financial markets can get very extreme at inflection points, and it has to be wondered whether such a point is approaching,” he wrote.
U.S. stocks “remain in the throes of a powerful year-end surge” likely to carry index futures to 6,300 by New Year’s, or 5% above Wednesday’s close, according to a note from Evercore ISI chartered market technician Rich Ross. Ross titled his note, “Tis the Season for a Squeezn,” referring to the potential for stocks to be pushed higher.
