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U.S. Stocks Clinch First Weekly Win of the Year Ahead of Trump’s Inauguration, Orders

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US stocks notch first weekly gain this year before Trump's inauguration, executive orders

Market Movements Ahead of Presidential Inauguration

Wall Street ended the week on a high note Friday, marking the first weekly gain of the year as anticipation builds for Donald Trump’s imminent return to the White House.

With the inauguration set for Monday, Trump’s initial days back in office are expected to be bustling with numerous executive orders. Analysts from Morgan Stanley predict, “Reports suggest 100 or more.” The implementation of Trump’s proposed tariffs will be closely scrutinized.

Despite Morgan Stanley economists anticipating a possible cut in interest rates by the Federal Reserve in its March policy meeting following recent cooler inflation figures, they cautioned that “sooner and higher-than-expected tariffs might remove the possibility of a rate cut in March.”

Bitcoin saw a significant rise of 4.95%, nearing the $105,000 mark, spurred by expectations of an early executive order from Trump prioritizing cryptocurrency. At last check, it was trading at $104,949, bolstered by rumors that Trump might declare crypto a national priority right at the start of his new term. Shares in crypto-related companies like Coinbase and Robinhood also experienced gains.

The broader S&P 500 index climbed by 1% to 5,996.71; the Dow Jones Industrial Average increased by 0.77% to 43,487.52; and the tech-heavy Nasdaq Composite surged by 1.51% to 19,630.20.

Shares of major social media players like Meta, the parent company of Facebook and Instagram, and Alphabet, which owns YouTube, moved higher after the Supreme Court upheld legislation potentially banning TikTok unless its Chinese parent company divests it. Trump is reportedly considering an executive order to prevent the ban, which could benefit Meta and Alphabet if TikTok were restricted, according to analysts.

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The yield on the benchmark 10-year Treasury note firmed up to 4.615%.

Assessing the Market as Inauguration Day Approaches

The U.S. stock market celebrated its first weekly gain of the year, with the S&P 500 and Dow recording their largest weekly gains since November, while the Nasdaq had its strongest week since December.

Michael Brown, a senior research strategist at Pepperstone, noted, “The current U.S. macroeconomic backdrop, especially based on December’s data, suggests a ‘best of all worlds’ scenario—higher employment, decreasing core inflation, and a robust consumer sector.” He added, “It’s quite the setup for President-elect Trump to inherit come Monday.”

Friday morning data exceeded expectations with December’s industrial production rising by 0.9% and capacity utilization improving to 77.6%, indicating efficient use of resources.

Larry Tentarelli, the chief technical strategist at Blue Chip Daily Trend Report, mentioned that from a technical standpoint, the stock market appears bullish. He explained that sentiment indicators, whether bullish or bearish, at extreme levels serve as “fairly reliable contrarian indicators.” Currently, the bullish sentiment for stocks is at its lowest since the major lows in November 2023, which could be a positive sign for the markets.

Tentarelli pointed out, “Investors tend to be most optimistic at market highs and most pessimistic near market lows.”

Focus on Corporate Developments

Corporate news also played a key role in market movements. Notable stock changes included:

  • Tesla’s stock increased by 3% amid speculation that founder Elon Musk might acquire TikTok. Previous reports had suggested that ByteDance was considering selling TikTok to Musk, who is known to be an ally of Trump.
  • J.B. Hunt’s shares fell over 7% after the transportation company reported earnings that fell short of what analysts expected.
  • Intel’s shares surged more than 9% amid rumors of a potential takeover.
  • Schlumberger’s stock climbed 6% after the oil company exceeded profit expectations for the fourth quarter, benefiting from increased demand for its drilling equipment and technology in both North American and international markets.
  • Shares in Truist Financial rose 6% following a report that its fourth-quarter profits increased due to higher interest earnings.
  • Shares of Trump Media retreated, closing down 2.37% just before Trump’s inauguration.
  • Novo Nordisk’s stock dropped more than 5% after its weight-loss drug Wegovy and diabetes treatment Ozempic were included on Medicare’s list of the next 15 drugs slated for price negotiations.

(This story has been updated with new information.)

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