Dow Heads for Its Best Month of the Year

U.S. stocks appeared poised to close out November with their strongest monthly gains of the year, fueled by a rally in semiconductor stocks during Friday's trading session.

‍

In early trading on Friday, major U.S. equity indexes posted modest gains. Markets, closed on Thursday for Thanksgiving, resumed operations with a shortened schedule, closing at 1 p.m. ET, while the bond market was set to close an hour later.

‍

Semiconductor stocks, including Applied Materials, Lam Research, and Nvidia, were among the top performers.
A Bloomberg report suggesting that the Biden administration’s anticipated restrictions on chip sales to China would be less stringent than earlier feared boosted international chip stocks on Thursday, contributing to the sector's strength.

‍

Meanwhile, Hasbro shares rose nearly 4% in morning trading. Speculation about a potential takeover surged after Elon Musk asked about the toy maker’s valuation on X, formerly Twitter. The Dow Jones Industrial Average was on track to achieve its largest monthly percentage gain since late 2023, according to Dow Jones Market Data.
The S&P 500 also appeared set to log its best monthly performance of 2024. Additionally, the small-cap Russell 2000 index climbed, lifting its monthly gain to over 11%.

‍

Broader Market Trends and Sentiment

November's rally follows a surge of optimism tied to Donald Trump’s U.S. election victory earlier this month. Investors anticipated that proposed tax cuts and deregulation could boost corporate profitability. Despite Trump's pledges to impose tariffs on major trading partners, equity traders largely dismissed the potential adverse effects, except in specific sectors like automotive stocks, which experienced declines. Susannah Streeter, head of money and markets at Hargreaves Lansdown, observed that "there is still quite a lot of euphoria around," attributing it to investor hopes that the most severe impacts of Trump's tariffs might not materialize. However, she cautioned that uncertainty remains, noting, "The jury is still out."

‍

European Markets and Economic Data

In Europe, the Stoxx Europe 600 index remained mostly flat after new data revealed a rise in eurozone inflation for November. French government bond yields dipped but stayed elevated relative to other eurozone nations as the country struggled to pass its budget. In a symbolic turn, France’s benchmark bond yield briefly surpassed that of Greece on Thursday.

‍
This shift underscores how Greece’s borrowing costs have significantly decreased as it sheds its reputation as a financial burden within the eurozone.

‍

Performance in Asia

Asian markets delivered mixed results. Chinese stocks advanced after Beijing announced an extension of tariff exemptions on certain U.S. goods through February. Investors interpreted the move as a gesture of goodwill toward the incoming Trump administration.

‍

In South Korea, the Kospi Composite Index dropped nearly 2%, weighed down by disappointing economic data. Meanwhile, Japan's markets faced upward pressure on interest rate expectations after Tokyo reported unexpectedly high inflation. The data prompted investors to speculate that the Bank of Japan might raise interest rates as early as next month. The Japanese yen strengthened by 1% against the U.S. dollar, continuing its recent rebound.

‍

Conclusion

November’s stock market performance reflects a blend of optimism in specific sectors, such as semiconductors, and broader economic expectations.
While U.S. equities are set to end the month on a high note, global markets remain influenced by a range of factors, including trade relations, inflation data, and monetary policy developments. As the year approaches its end, investor sentiment will likely hinge on the interplay between economic resilience and evolving policy measures across major economies.

‍