The US stock markets have recently ended the week and month on a positive note, with the Dow Jones Industrial Average and the S&P 500 reaching new record highs. In November, the Dow saw a significant increase of 7.5%, while the S&P 500 gained 5.7%. The Nasdaq 100 also contributed to this positive momentum with a rise of 5.2%. These gains reflect a growing sense of optimism among investors, particularly in light of the potential political landscape as former President Trump prepares for possible actions in 2025.
Historical seasonal trends suggest that US equities will continue to see gains into mid-January. The last two weeks of December and the first two weeks of January are typically favorable, creating the most advantageous four-week stretch of the year. Investors are closely watching upcoming economic indicators, such as the November non-farm payrolls jobs report and speeches from Federal Reserve officials, for insights that could impact the market.
The upcoming non-farm payrolls report, scheduled for release on December 7, is highly anticipated. In October, the US economy added only 12,000 jobs, below expectations, but the unemployment rate remained steady at 4.1%. Economists forecast an addition of 200,000 jobs for November, with a potential rise in the unemployment rate to 4.2%. Market expectations also suggest a 65% probability of a 25 basis point rate cut at the Federal Open Market Committee meeting on December 19.
From a technical perspective, analysts expect the Nasdaq 100 to retest and potentially break its previous record high, while the S&P 500 is expected to maintain its upward movement. The interplay of economic data, investor sentiment, and technical indicators will be crucial in determining the trajectory of US equities in the coming weeks.