Tony Roth, Chief Investment Officer at Wilmington Trust, suggests the S&P 500 could reach the mid-6,000s in the next two months, driven by a recent surge in market confidence.
On Monday, the S&P 500 closed above 6,000, and the Dow Jones Industrial Average surpassed 44,000, bolstered by post-election optimism after Donald Trump’s presidential win and the Federal Reserve’s recent rate cut of 25 basis points.
Clark Geranen, chief market strategist at CalBay Investments, noted that the 6,000 milestone for the S&P 500 is “psychologically significant,” potentially sparking increased interest from investors still holding cash in money-market funds and bonds. Geranen pointed to reduced stock-market volatility (as measured by the VIX) as a positive shift from “market jitters to market joy.”
On Monday, the S&P 500 climbed 5.81 points (0.1%), closing at 6,001.35—its first close above 6,000—while the Dow rose 0.7%, ending at 44,293.13. This marked the shortest period in history for a 1,000-point milestone for the index, according to Dow Jones Market Data.
Top-performing stocks included Vistra Corp., Palantir Technologies Inc., Targa Resources Corp., Nvidia Corp., and United Airlines Holdings Inc.
The recent rally was spurred by Trump’s return to the White House and the potential for a Republican-controlled Congress. The Fed’s latest rate cut helped sustain the post-election upswing. The Nasdaq Composite Index, meanwhile, managed a modest 0.1% gain on Monday, following a robust weekly performance.
Despite initial optimism, Wells Fargo’s Paul Christopher cautioned that the market’s focused reaction to selective policy possibilities may not create sustainable investment opportunities. He recommends a more measured approach to assess the new administration’s main policy directions.
In bond markets, the 10-year Treasury yield recently ended at 4.307%, stoking concerns about inflation and potentially higher borrowing costs impacting equities. Roth remains optimistic for the short term but anticipates challenges once Trump assumes office, especially as markets weigh the impact of his policy moves on taxes and deficits.
