US stocks climbed on Monday, with the Dow Jones Industrial Average hitting intraday record highs and small caps driving gains in the Russell 2000. Optimism around President-elect Donald Trump’s nomination of Scott Bessent for Treasury secretary bolstered investor confidence as markets looked ahead to a key inflation report.
Record Highs for the Dow and Russell 2000
The Dow Jones Industrial Average rose 0.9%, or approximately 300 points, putting it on track for another record close. The S&P 500 gained 0.2%, while the Nasdaq Composite advanced modestly despite a 3% slide in Nvidia shares.
Small-cap stocks were the standout performers, with the Russell 2000 gaining more than 2% and heading for a record close. The rally reflects increased investor optimism in smaller, domestically focused companies, which often benefit from shifts in fiscal and regulatory policy.
Optimism Around Scott Bessent’s Treasury Nomination
Scott Bessent’s nomination as Treasury secretary, announced late Friday, has been well-received by markets. Viewed as a pragmatic and investor-friendly pick, Bessent’s selection helped ease concerns about Trump’s potential inflationary policies.
The benchmark 10-year Treasury yield dipped below 4.3% on Monday, signaling some relief among bond investors. Bessent’s nomination appears to have tempered fears of aggressive fiscal measures that could stoke inflation, at least temporarily.
Inflation Data on the Horizon
Investors are also awaiting the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) index, set to be released Wednesday. Economists expect a slight increase in core PCE, which excludes volatile food and energy prices. This data will provide critical insights into the inflationary environment as Trump prepares to take office.
Holiday-Shortened Trading Week
With US markets closed Thursday for Thanksgiving and closing early on Friday, trading volume is expected to be lighter this week. The upbeat start to the week follows a strong rally that saw major indexes log weekly gains.
Closing Thoughts
The rally in US stocks on Monday reflects optimism about new leadership at the Treasury and a sense of stability heading into a data-driven week. With record highs for the Dow and Russell 2000, investors are finding confidence in a market bolstered by both policy expectations and strong small-cap performance.