NEW YORK — A rally for Big Tech stocks on Monday helped Wall Street claw back about half its loss from last week.
The S&P 500 rose 29.97, or 0.7%, to 4,487.46, coming off its first losing week in the last three.
Traders work on the floor June 14 at the New York Stock Exchange.
The Dow Jones Industrial Average gained 87.13 points, or 0.3%, to 34,663.72, and the Nasdaq composite climbed 156.37, or 1.1%, to 13,917.89.
Like last week, some big technology-oriented stocks led the way. Tesla jumped 10.1%, Amazon climbed 3.5% and Meta Platforms rose 3.2%.
Tech stocks were at the head of the line leading the market lower last week as yields climbed. Higher yields hurt all kinds of stocks, but high-growth stocks tend to be among the hardest hit. Yields rose last week after reports showed the U.S. economy remains stronger than expected, which could be adding more fuel to pressures keeping inflation high.
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This upcoming week will offer a huge data point for the Federal Reserve, which is weighing whether to keep raising interest rates in its effort to get inflation back to 2%. On Wednesday, the U.S. government will offer the latest monthly update on prices consumers are paying across the economy, and the forecast is they were 3.6% higher in August than a year earlier.
The Fed has already hiked its main interest rate to the highest level in more than two decades, and it has said it will make upcoming moves based on how inflation and other parts of the economy perform. Inflation has come down from last year’s peak above 9%, but economists warn the last bit of improvement to get to the Fed’s target could be the most difficult to achieve.
With Fed officials no longer giving speeches ahead of their meeting next week on interest rates, “the data will do all of the talking this week,” economists at Deutsche Bank said in a report.
Those economists say a report on Thursday about inflation at the wholesale level will be nearly as important as the data on inflation at the consumer level. High growth for wages in the health care industry could be pushing upward on inflation there, they say.
A separate report Thursday will also show how much U.S. households spent at retailers last month. Strong spending there recently has helped the economy avoid a long-predicted recession. But it also could encourage companies to keep trying to raise prices, pushing upward on inflation.
Yields held relatively steady on Monday, with the 10-year Treasury yield up to 4.28% from 4.26% late Friday. The two-year Treasury yield rose to 5.00% after drifting through the day, up slightly from 4.99% late Friday.
The Strongest Post-Election Stock Markets in History
The Strongest Post-Election Stock Markets in History
Photo Credit: oneinchpunch / Shutterstock
The U.S. political landscape has become more polarized than ever before. In fact, a study of developed democracies around the world found that the political polarization trend in the U.S. is more dramatic than in any other country in the study. In the months prior to the 2020 election, the overwhelming majority of both Biden and Trump supporters responded that they would “be very concerned about the country’s direction” and believed that it would cause lasting harm to the U.S. if their opponent won. This amount of turmoil surrounding presidential elections not only influences Americans’ everyday decisions, but the volatility can be seen in the U.S. stock market as well.
Voter turnout is the highest it has been in 120 years
As recent presidential elections have become increasingly contentious, certain issues facing Americans are coming into focus. The economy has always been a hot-button issue for American voters, but recent inflation and stock market volatility have made it an increasingly important concern. This is especially true for Republicans, who consider the economy the most important issue facing our country.
The combination of increased political polarization alongside a rocky economy has likely contributed to the record levels of voter turnout observed in recent years. Since bottoming out at just under 52% in 1996, voter turnout has steadily risen to nearly 67% during the 2020 election cycle. This level of civic engagement has not been seen since 1900—a sign of heightened voter focus.
Stock gains tend to even out over time
Despite increasing polarization around elections, one political party does not appear to have a significantly greater impact on the stock market than another. In the short term, the post-election stock market appears to slightly favor Republicans, with six out of the nine since 1932 producing positive two-week returns. This may be due to the fact that Republicans tend to favor less government regulation in business, and are often perceived to prioritize business and economic interests.
Over time, however, there is not a clear difference in the stock market when one political party is elected over another. In fact, there have only been five out of the 23 election cycles since 1932 that produced negative returns in the four years after election day. And of the five elections with the largest market price increases during the four years after election day, three were Democratic presidents—Franklin D. Roosevelt in 1932 and Bill Clinton in 1992 and 1996. Republican presidents Dwight D. Eisenhower (1952) and Ronald Reagan (1984) round out the top five.
To determine the strongest post-election stock markets in history, researchers at U.S. Money Reserve ranked post-presidential election stock markets from 1896 to 2020 according to the percentage change in the Dow Jones Industrial Average® stock market index two weeks after each election. In the event of a tie, the presidential election with the larger percentage change from election day to inauguration day was ranked higher.
Here are the strongest post-election stock markets in history.
15. 1916 presidential election
- Stock market price change (2 weeks post-election): +2.7%
- Stock market price change (inauguration day): -11.4%
- Stock market price change (4 years post-election): -20.3%
- Elected president: Woodrow Wilson (Democratic)
- Runner-up: Charles Evans Hughes (Republican)
14. 1972 presidential election
- Stock market price change (2 weeks post-election): +2.9%
- Stock market price change (inauguration day): +4.2%
- Stock market price change (4 years post-election): -1.9%
- Elected president: Richard Nixon (Republican)
- Runner-up: George McGovern (Democratic)
13. 1952 presidential election
- Stock market price change (2 weeks post-election): +2.9%
- Stock market price change (inauguration day): +6.6%
- Stock market price change (4 years post-election): +83.3%
- Elected president: Dwight D. Eisenhower (Republican)
- Runner-up: Adlai Stevenson II (Democratic)
12. 2016 presidential election
- Stock market price change (2 weeks post-election): +4.2%
- Stock market price change (inauguration day): +8.6%
- Stock market price change (4 years post-election): +47.5%
- Elected president: Donald Trump (Republican)
- Runner-up: Hillary Clinton (Democratic)
11. 2004 presidential election
- Stock market price change (2 weeks post-election): +4.3%
- Stock market price change (inauguration day): +4.1%
- Stock market price change (4 years post-election): -7.3%
- Elected president: George W. Bush (Republican)
- Runner-up: John Kerry (Democratic)
10. 1936 presidential election
- Stock market price change (2 weeks post-election): +4.7%
- Stock market price change (inauguration day): +5.3%
- Stock market price change (4 years post-election): -23.5%
- Elected president: Franklin D. Roosevelt (Democratic)
- Runner-up: Alf Landon (Republican)
9. 1904 presidential election
- Stock market price change (2 weeks post-election): +5.4%
- Stock market price change (inauguration day): +14.7%
- Stock market price change (4 years post-election): +25.2%
- Elected president: Theodore Roosevelt (Republican)
- Runner-up: Alton B. Parker (Democratic)
8. 1908 presidential election
- Stock market price change (2 weeks post-election): +5.8%
- Stock market price change (inauguration day): -1.3%
- Stock market price change (4 years post-election): +8.9%
- Elected president: William Howard Taft (Republican)
- Runner-up: William Jennings Bryan (Democratic)
7. 1996 presidential election
- Stock market price change (2 weeks post-election): +5.9%
- Stock market price change (inauguration day): +13.3%
- Stock market price change (4 years post-election): +81.7%
- Elected president: Bill Clinton (Democratic)
- Runner-up: Bob Dole (Republican)
6. 1896 presidential election
- Stock market price change (2 weeks post-election): +6.5%
- Stock market price change (inauguration day): +1.0%
- Stock market price change (4 years post-election): +48.8%
- Elected president: William McKinley (Republican)
- Runner-up: William Jennings Bryan (Democratic)
5. 1980 presidential election
- Stock market price change (2 weeks post-election): +6.5%
- Stock market price change (inauguration day): +1.4%
- Stock market price change (4 years post-election): +31.2%
- Elected president: Ronald Reagan (Republican)
- Runner-up: Jimmy Carter (Democratic)
4. 1924 presidential election
- Stock market price change (2 weeks post-election): +6.6%
- Stock market price change (inauguration day): +18.6%
- Stock market price change (4 years post-election): +147.9%
- Elected president: Calvin Coolidge (Republican)
- Runner-up: John W. Davis (Democratic)
3. 1928 presidential election
- Stock market price change (2 weeks post-election): +10.2%
- Stock market price change (inauguration day): +23.9%
- Stock market price change (4 years post-election): -74.9%
- Elected president: Herbert Hoover (Republican)
- Runner-up: Al Smith (Democratic)
2. 2020 presidential election
- Stock market price change (2 weeks post-election): +10.6%
- Stock market price change (inauguration day): +15.8%
- Stock market price change (4 years post-election): +29.8%
- Elected president: Joe Biden (Democratic)
- Runner-up: Donald Trump (Republican)
1. 1900 presidential election
- Stock market price change (2 weeks post-election): +13.4%
- Stock market price change (inauguration day): +11.0%
- Stock market price change (4 years post-election): +8.8%
- Elected president: William McKinley (Republican)
- Runner-up: William Jennings Bryan (Democratic)
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