Dow Surges 400 Points to Record High After Trump Nominates Scott Bessent for Treasury

The Dow Jones Industrial Average rose 409 points, or 0.9%, reaching a record high on Monday, driven by President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary. The S&P 500 also added 0.3%, and the Nasdaq Composite gained 0.3%, nearing a record high. Meanwhile, the Russell 2000 surged nearly 2%, buoyed partly by a rally in retail stocks.

Bessent of the Key Square Group is considered a more market-oriented type that advocates deregulation and the development of the economy. Consistent with Trump’s economic policy direction, his other positions include the gradual introduction of tariffs and standing down on regulations, both of which are portending good news for equity markets. Treasury yields pulled back significantly. Specifically, the 10-year yield shed over 11 bps supports this view.

Some market strategists cited the equity market’s ‘textbook’ rise and the bond market’s subsequent decline in yields as positive reactions to the nomination. About 61 percent of the S&P 500 members posted gains during the session, pointing to the tapes’ overall strength.

Even with the positive market sentiment, the problem of moderating Trump policies with the microstructure inflation risk remains. Bessent may partly offset these reasons by emphasizing energy expansion and fiscal discipline, yet the prospect of protectionist trade remains uncertain. The changes represent a key point for markets as they approach the holiday week.

This article first appeared on GuruFocus.