STOCK MARKET SNAPSHOT AS OF 07/16/2024

NASDAQ-Adv: 2,542 Dec: 1,696 NYSE-Adv: 2,290 Dec: 1,695
(Source: Nasdaq)

Wall Street closed higher on Monday, building on Friday's rally as rising expectations of a second Donald Trump presidency after a failed assassination attempt raised hopes for a looser regulatory environment.

The growing likelihood that the US Federal Reserve will begin cutting its key interest rate as early as September has also helped fuel risk appetite.
While the three major US stock indices closed well below their session highs, the Dow Jones Industrial Average hit a record high at the close.

Economically sensitive small caps (.RUT), opens new tab and transportation stocks (.DJT), opens new tab significantly outperformed the broader market.
The assassination attempt on presumptive Republican presidential nominee Donald Trump in Pennsylvania on Saturday appears to have improved his chances of winning the election. A Trump presidency would likely mean more aggressive trade policies, extended tax cuts and deregulation in areas ranging from climate change to cryptocurrencies.

Online betting site PredictIt showed bets on an election victory at 67 cents for Trump, up from 60 cents on Friday, with a victory for Democratic US President Joe Biden at 26 cents.

“The headline-grabbing event — the attempted assassination of Donald Trump — didn’t impact financial results,” said Sam Stovall, chief investment strategist at CFRA Research in New York. “GDP forecasts remain unchanged, as do expectations that the Fed will begin cutting rates in September. Corporate earnings are ahead of expectations.”

“The market dynamics therefore remain based on investor optimism,” Stovall added.
Sentiment was also boosted by optimism that the U.S. Federal Reserve will enter its expected rate-cutting phase as early as September, with up to three cuts in total by the end of the year.

“The rate cut in September is pretty much a given,” said Ross Mayfield, an investment strategy analyst at Baird in Louisville, Ky. “We’re almost exactly where we were seven months ago, which is the promise of a Fed rate cut without a recession. A lot still depends on the Fed coming to the party.”

Speaking at the Economic Club of Washington, Fed Chairman Jerome Powell reiterated his belief Monday that the U.S. economy can avoid recession, and recent data shows progress in reducing inflation to the central bank's 2% target.
The Dow Jones Industrial Average (.DJI), opens in a new tab, rose 210.82 points, or 0.53%, to 40,211.72, the S&P 500 (.SPX), opens in a new tab, gained 15.87 points, or 0.28%, to 5,631.22 and the Nasdaq Composite (.IXIC), opens in a new tab, added 74.12 points, or 0.40%, to 18,472.57.

Traders work on the floor of the NYSE in New York

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 7, 2024. REUTERS/Brendan McDermid/File Photo Buying licensing rights, opens in new tab

Among the 11 major S&P 500 sectors, energy stocks (.SPNY), opens new tab, enjoyed the biggest percentage gain, while utilities (.SPLRCU), opens new tab, lagged.

Goldman Sachs (GS.N) more than doubled its second-quarter profit, beating analysts' expectations on strong debt underwriting and fixed-income trading. The broker's stock rose 2.6%.

Shares of Macy's Inc (MN), opens new tab, fell 11.7% after the department store abandoned takeover talks with Arkhouse Management and Brigade Capital.
The prospect of a second Trump presidency sent shares of Trump Media & Technology Group (DJT.O), opens new tab, soaring 31.4%.

Crypto stocks also performed well, with Coinbase Global (COIN.O), Marathon Digital Holdings (MARA.O), and Riot Platforms (RIOT.O) up between 11.4% and 18.3%.

Other stocks expected to benefit from Trump's possible second term rose, with gunmaker Smith & Wesson (SWBI.O) and prison operator GEO Group (GEO.N) gaining 11.4% and 9.3%, respectively.

In contrast, solar energy companies fell as the prospect of Trump's election reduced expectations for U.S. subsidies for renewable energy.
Shares of Sunrun (RUN.O), opens new tab and SolarEdge Technologies (SEDG.O), opens new tab fell 9.0% and 15.4%, respectively.

Shares of Chinese companies listed in the United States also fell on fears of tighter trade restrictions under another Trump administration.
The IShares China Largecap ETF fell 2.2%.

Advancing stocks outnumbered decliners on the New York Stock Exchange by a ratio of 1.35 to 1; on the Nasdaq, a ratio of 1.50 to 1 favored rising stocks.

The S&P 500 recorded 65 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 203 new highs and 33 new lows.
Volume on U.S. exchanges totaled 11.07 billion shares, compared with an average of 11.59 billion for the entire session over the past 20 trading days.
Source: Reuters (Reporting by Stephen Culp in New York, with contributions by Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by Shinjini Ganguli and Matthew Lewis)