U.S. stocks closed higher on Friday, securing the first weekly advance of the year, as investors anticipated a busy start to Donald Trump’s return to the White House. Speculation over executive orders, economic policy shifts, and potential market impacts fueled gains across key sectors.
Stocks Log Best Week in Months
The S&P 500 rose 1% to 5,996.71, while the Dow Jones Industrial Average gained 0.77% to 43,487.52. The Nasdaq Composite led the pack, climbing 1.51% to 19,630.20. This marked the strongest weekly performance for the S&P 500 and Dow since November, and the best for the Nasdaq since December.
Market optimism was bolstered by December’s economic data, including better-than-expected industrial production and capacity utilization, both indicating robust economic momentum. Michael Brown of Pepperstone described the current economic landscape as “the best of all worlds,” citing strong employment, declining core inflation, and resilient consumer activity.
Bitcoin Surges as Crypto Policy Speculation Intensifies
Bitcoin jumped 4.95%, nearing $105,000, as reports surfaced suggesting Trump may issue an executive order prioritizing cryptocurrency on his first day. Shares of Coinbase and Robinhood, closely tied to crypto trends, also rallied. This move reflects growing anticipation of policy clarity on digital assets under the new administration.
Corporate Winners and Losers
Friday’s session also saw significant moves in corporate stocks, with several high-profile developments:
- Tesla gained 3% on speculation Elon Musk may acquire TikTok, following reports of ByteDance considering a sale to Musk.
- Intel soared over 9% amid rumors of a potential takeover.
- Schlumberger rose 6% after posting strong quarterly profits, buoyed by increased demand for drilling technology.
- Novo Nordisk fell over 5% as its drugs Wegovy and Ozempic were added to Medicare’s price negotiation list, raising concerns about future revenue.
- Truist Financial climbed 6% on solid quarterly earnings driven by higher interest income.
Notably, Trump Media shares declined 2.37% ahead of the inauguration, reversing early session gains.
Spotlight on TikTok Ban and Social Media Giants
The Supreme Court’s decision to uphold a potential TikTok ban if its Chinese parent company does not divest ownership further lifted sentiment for Meta and Alphabet, which gained on speculation they could benefit from reduced competition. Analysts suggest Trump may issue an executive order halting the ban, which could shift the outlook.
Technical and Sentiment Indicators Signal Bullish Outlook
Larry Tentarelli, a technical strategist, highlighted historically low bullish sentiment levels, a contrarian indicator that often signals market strength ahead. “Investors tend to be most bearish at market lows,” Tentarelli noted, suggesting the recent rally could gain further traction.
Looking Ahead to Inauguration Monday
As Trump prepares to assume office on Monday, the markets are bracing for potential volatility tied to executive orders, including tariffs, energy policies, and crypto regulations. Morgan Stanley analysts warned that sooner-than-expected tariffs could dampen Federal Reserve rate cut expectations in March, particularly after cooler inflation data earlier this week.
Investors will be closely watching for signals from the administration’s early actions, with the expectation of over 100 executive orders in the pipeline. This pivotal week may set the tone for both economic policy and market performance in 2025.
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