The US stock market saw a remarkable rally on Monday, with the Dow Jones Industrial Average leaping above 44,000 for the first time in history. Investors welcomed the postelection momentum with optimism, particularly in banking and crypto stocks, as expectations grew for a regulatory environment favourable to financial institutions. Major indexes, including the S&P 500, also hit record highs, though the tech-heavy Nasdaq lagged. Sentiment was further boosted by notable gains in Tesla and cryptocurrency stocks, while rising Bitcoin prices underscored the market’s resilient mood amid a new presidential term. As the week unfolds, traders are closely watching economic data releases for further cues on the Federal Reserve’s trajectory. The US Treasury market was closed on Monday for the Veterans Day holiday after notable postelection moves last week.

Key Takeaways:

  • Dow Surpasses 44,000 for the First Time: The Dow Jones Industrial Average reached a historic high, climbing 304 points, or 0.69%, to close at 44,293.69. This milestone marks the first time the Dow has surpassed 44,000, largely driven by optimism in financial stocks and the potential for regulatory easing. Notable gainers included JPMorgan Chase, up 1%, and Goldman Sachs, which climbed 2.2%.
  • S&P 500 Breaks 6,000 Milestone: The S&P 500 gained 0.1%, closing at a record high of 6,001.35, surpassing the 6,000 mark for the first time. This rise reflects growing confidence across sectors, particularly in financials, with Bank of America and Citigroup shares both up around 2%.
  • Nasdaq Nears Flatline Amid Tech Sector Divergence: The Nasdaq Composite edged up by 0.06% to close at 19,298.76, as tech stocks showed mixed results. While Tesla surged over 9% following optimistic postelection sentiment, major tech players such as Apple, Microsoft, and Amazon saw declines, with Apple down nearly 2% and Microsoft and Amazon both slipping about 1%.
  • Bitcoin Surges to Record Highs Amid Deregulatory Hopes: Bitcoin continued its upward momentum, reaching an all-time high (over $89,000), as investor interest swelled following postelection optimism. Open interest for Bitcoin futures with a price target of $90,000 rose to more than $2.8 billion, underscoring bullish sentiment in the cryptocurrency market. Associated stocks rallied, with Coinbase surging nearly 20%, and Mara Holdings soaring 30%, while Ether climbed above $3,000.
  • European Markets Start Strong in Data-Heavy Week: The pan-European Stoxx 600 rose 1.1%, while the FTSE 100 added 0.65% to close at 8,125.19. France’s CAC 40 climbed 1.2% to reach 7,427, recovering from recent lows, and Germany’s DAX advanced 1.29%. Meanwhile, Spain’s Melia Hotels (MEL.MC) reported a 40% rise in third-quarter net profit, totalling €74.9 million ($80.06 million), largely due to a robust summer season. Melia’s revenue also rose by 2.7%, reaching €584 million, reflecting a strong recovery in tourism demand. 
  • Asia-Pacific Markets Show Mixed Reactions to China’s Stimulus Package: Asian markets displayed varied responses as China’s recent five-year, 10 trillion yuan ($1.4 trillion) stimulus package sparked debate over its effectiveness. Hong Kong’s Hang Seng dropped 1.62%, while China’s CSI 300 gained 0.66% to close at 4,131.13. Japan’s Nikkei 225 rose slightly to 39,533.32, though the broader Topix slipped 0.09% to 2,739.68. South Korea’s Kospi fell 1.15% to 2,531.66, marking its lowest level since September, and Australia’s S&P/ASX 200 was down 0.43% to 8,266.2.
  • Oil Prices Drop on Weak Chinese Economic Data and Strong US Dollar: Brent crude futures fell $2.04, or 2.76%, to $71.83 per barrel, while US West Texas Intermediate (WTI) dropped $2.34, settling at $68.04 per barrel. Weak economic data from China cast doubt on demand, and the US dollar’s strength added downward pressure, making oil more expensive for foreign buyers and weighing on global energy prices.

FX Today:

  • EUR/USD Under Pressure as Resistance Holds Firm: EUR/USD remained subdued on Monday, closing at 1.0653 as the pair struggled to gain traction above critical moving averages. Attempts to recover met resistance around the 50-period SMA at 1.0811, aligning closely with the 100-period SMA at 1.0813. This ongoing downtrend has reinforced bearish momentum as sellers maintained control throughout the session. Should EUR/USD drop below the recent support level of 1.0650, further downside toward 1.0600 may follow. Conversely, a push above the 50-period SMA could signal a short-term recovery, although resistance at the 100-period SMA remains a substantial hurdle. Key levels to watch are the 1.0650 support and 1.0811 resistance, with a break below support likely to strengthen the bearish outlook.
  • GBP/USD Consolidates Near Support as Selling Pressure Eases: GBP/USD hovered around 1.2865, consolidating after recent declines. Resistance at the 50-period SMA near 1.2937 and the 100-period SMA at 1.2960 kept upward momentum in check, reinforcing a broader downtrend. The pair retreated as sellers regained control, with 1.2850 acting as an immediate support area where buyers attempted to establish a base. If GBP/USD were to drop below 1.2850, further downside could lead to the 1.2800 level. On the upside, a close above the 50-period SMA might indicate a reversal attempt, though resistance at the psychological 1.3000 level remains strong. Key support at 1.2850 and resistance at 1.2937 are critical for the short-term outlook.
  • USD/CHF Holds Steady After Surpassing Key Moving Averages: USD/CHF closed near 0.8808, maintaining a bullish stance after successfully climbing above crucial moving averages. The pair initially faced resistance around the 50-period SMA but managed to break through, sustaining its upward trajectory through the close. Momentum strengthened as USD/CHF remained above the 100-period SMA at 0.8697, with additional support from the 200-period SMA at 0.8613. This upward movement signals continued demand for the dollar against the Swiss franc, with the 0.8900 level acting as the next resistance. If the pair slips below the 100-period SMA, it may prompt sellers to re-enter, potentially targeting the 0.8650 support. Key levels for traders include 0.8900 as resistance, while the 200-period SMA at 0.8613 provides substantial support.
  • AUD/USD Extends Losses Below Key Resistance Levels: AUD/USD remained under pressure, settling near 0.6570 as sellers dominated the session. Attempts to break above the 50-period SMA at 0.6594 failed, keeping the pair below both the 100-period SMA at 0.6614 and the 200-period SMA at 0.6703. These levels acted as firm resistance, preserving the bearish structure as sellers capitalised on brief rallies. Should AUD/USD fall below the recent lows around 0.6550, further declines toward the 0.6500 support level are anticipated. Conversely, a move above the 50-period SMA may provide short-term relief, though the 100-period SMA remains a significant barrier. Traders will be closely watching 0.6550 as support and 0.6594 as immediate resistance.
  • Gold Pulls Back as Resistance Levels Hold: Gold faced a notable decline on Monday, closing at $2,625.03 after failing to breach critical resistance at the 50-period SMA at $2,716 and the 100-period SMA at $2,727. These levels acted as barriers, with sellers stepping back in to drive prices lower. This pullback has reinforced a bearish bias, with key support around $2,600 expected to play a crucial role if downward momentum continues. If gold manages to break above $2,716, it could signal a potential bullish shift, though resistance at the 100-period SMA is likely to remain a substantial obstacle. Key support and resistance to monitor are $2,600 and $2,716, respectively, as gold traders assess market sentiment.

Market Movers:

  • Tesla Surges as Investors Bet on Favourable Policies: Tesla shares rallied over 9% on Monday, continuing its impressive post-election performance with a 29% gain last week. Tesla’s strong gains helped maintain sentiment in a tech sector otherwise showing mixed results.
  • AbbVie Drops After Schizophrenia Drug Disappointment: AbbVie shares plummeted 12.6% following the release of disappointing results from two Phase 2 trials for its experimental schizophrenia drug. The drug failed to show statistically significant symptom improvement, spurring investors to sell. 
  • Crypto Stocks Rally on Record Bitcoin Prices: Crypto-related stocks surged as Bitcoin hit a record high, fuelled by optimism for reduced regulatory pressures. Coinbase jumped 19.8%, trading above $300 for the first time since 2021, while MicroStrategy advanced 25.7%. Bitcoin mining stocks also benefited, with MARA Holdings climbing 29.9% and Riot Platforms up 16.9%, as bullish sentiment around the cryptocurrency market continued.
  • Wells Fargo and Major Banks Climb on Deregulatory Hopes: Shares of major banks continued their upward trend, with Wells Fargo up 3.6%, Bank of America rising 2.1%, and Morgan Stanley gaining 3.1%. Investors remain optimistic that the postelection environment could lead to a more lenient regulatory landscape.
  • Cigna Jumps After Merger Update and Forecast Reiteration: Cigna shares climbed 7.3% after the company announced it would not be pursuing a merger with Humana, which fell 8% on the news. Additionally, Cigna reaffirmed its fiscal 2024 and 2025 guidance. 
  • RadNet Pops on Strong Earnings and GE Partnership: RadNet shares surged over 19% after the radiology company reported better-than-expected third-quarter earnings and revenue. Investors were further encouraged by RadNet’s announcement of a strategic collaboration with GE HealthCare.

As the week kicks off, the major indexes hit record highs and crypto assets surge, led by Bitcoin’s all-time high. The Dow’s historic close above 44,000 and the S&P 500’s breakthrough past 6,000 reflect renewed confidence in a deregulatory environment that could favour financials and certain tech sectors. However, uneven reactions across global markets hint at underlying economic concerns, particularly in Asia, where China’s new stimulus package has yet to fully allay growth fears. With upcoming US inflation data set to offer further insight into the Federal Reserve’s direction, market sentiment remains upbeat but tempered, as traders assess the broader implications of shifting policies and economic signals worldwide.