The Three Catalysts Sending Stocks to the Moon

Keeping with the theme of the week, stocks’ fast-and-furious rally continued again today. Indeed, it was a really, really good day for the markets. 

Sure, at the headline level, the Nasdaq only climbed about 1.5%, while the S&P 500 rose just 0.7%. That’s a pretty normal “good day” for Wall Street; nothing to write home about. 

But if we look underneath the hood, we see that the price action at the individual stock level was quite impressive. 

More than 50 different stocks rallied 20%-plus today. About 15 rallied more than 30%. Seven surged more than 40% higher. Five rocketed over 50%, and two stocks completely doubled…

All in one day. 

That is some truly sensational price action. 

And from what we can tell, three big catalysts are driving this bullishness onward. 

The ‘Trump Bump’ Is Leading Stocks Higher This Week

The most prominent catalyst lighting a fire under stocks this week – what folks are calling the ‘Trump Bump.’ Stocks continue to rally on the belief that President-elect Trump’s policies will be good for the markets. 

While many initially thought that Trump’s tariffs would be inflationary, several experts have begun to second-guess that consensus belief. 

Bloomberg’s Anna Wong is among those dissenters. In a research note this week, Wong laid out what she believes is the most plausible path forward. She anticipates that Trump won’t impose sweeping universal tariffs, which would limit their inflationary impact. And she isn’t alone in that thinking.

In other words, many economists are now shifting their perspective, endorsing the idea that Trump’s tariffs will likely cause some reinflation but nothing worrisome. As a result, Treasury yields actually dropped today as markets placed faith in a Goldilocks outcome – pro-growth policies that don’t spur inflation.