(Bloomberg) — A rally in the world’s largest technology companies supported the broader stock market, while bond yields continued to fall amid the Federal Reserve’s bets on lower interest rates.
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Also boosting sentiment on Friday were headlines in which US President-elect Donald Trump and Chinese President Xi Jinping spoke by phone, a conversation that could set the tone for relations between the world’s two largest economies. The S&P 500 rose nearly 1%, with the benchmark index poised for its biggest weekly advance since US election week. The Nasdaq 100 rose more than 1.5%. Intel Corp stock jumped 7% after SemiAccurate said the company could be a takeover target.
Trump, who is scheduled to be sworn in as the 47th president of the United States on Monday, emphasized his focus on key priorities such as raising tariffs and cutting taxes. Stocks rose after he won the presidential election in November on bets that his proposals would boost corporate profits at a time when the economy remains resilient. While stocks stumbled last month on hawkish Fed signals, recent data showing inflation slowing has reignited bets on interest rate cuts.
“The decline in inflation data this week and the positive reaction to earnings at many financial companies led to a rally in bonds and stocks,” said Craig Johnson of Piper Sandler. “Recent short-term oversold conditions and weak bullish sentiment support major indices recovering from within their underlying uptrends.”
The Standard & Poor’s 500 rose 0.9%. The Nasdaq 100 rose 1.7%. The Dow Jones Industrial Average rose 0.7%. Bloomberg’s “Magnificent Seven” gauge of giant companies rose 1.8%. The Russell 2000 advanced 1%.
The yield on 10-year Treasury bonds fell by three basis points to 4.59%. The Bloomberg Dollar Spot Index rose 0.3%. Bitcoin is hovering near $102,000.
Trump’s return to the White House is likely to protect US stocks from a major sell-off, according to strategists at Bank of America Corp, as investors focus on his protectionist agenda and proposals to cut corporate taxes.
Strategist Michael Hartnett wrote in a note that U.S. stocks are “Trump-protected” from the downside, though he doesn’t expect sharp gains as well due to risks including higher concentration in big tech stocks, valuations and investor attitudes.
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