U.S. Stock Markets Rise, Bessent as Treasury Secretary Eases Tensions

U.S. stock index futures rose Monday as Wall Street appeared relieved by President-elect Donald Trump’s big-name appointment of investor Scott Bessent as Treasury secretary.

Dow Jones futures were up 290 points, something like 0.7%, S&P 500 futures were up about 30 points, something around 0.5%, and Nasdaq 100 futures gained about 125 points, 0.6%.

These gains followed a positive week in which investors shifted from technology stocks to cyclical stocks. The Dow Jones Industrial Average advanced nearly 2%, closing at a record high, while the S&P 500 and the technology-focused Nasdaq Composite both rose 1.7%.

Wall Street Calms After Bessent’s Appointment

Bessent’s appointment resolved a significant uncertainty for markets, given the Treasury Secretary’s pivotal role in shaping economic and trade policy.

Bessent, a seasoned investor, has advocated for tax reforms and deregulation in the United States. He has also opposed overly stringent trade tariffs, reducing fears of a costly trade war under the Trump administration.

The U.S. dollar fell 0.6% following Bessent’s nomination, while Treasury yields, a key pressure point for Wall Street, declined sharply. The 10-year Treasury yield dropped 1.4%, further easing concerns in the market.

Bessent’s appointment came as part of a series of cabinet picks by Trump. Other notable nominations include Pete Hegseth as Secretary of Defense, Howard Lutnick as Secretary of Commerce, and Mike Waltz, a noted China hawk, as National Security Advisor.

Overall market sentiment was bolstered by reports that Israel was close to reaching a ceasefire agreement with Hezbollah in Lebanon, potentially marking a de-escalation in the long-standing Middle East conflict.

PCE Data in the Spotlight

This week’s focus will shift to the PCE price index data, the Federal Reserve’s preferred inflation gauge. Economists forecast the PCE index to have risen approximately 2.3% year-over-year in October.

Although U.S. consumer and producer price data for November will be released ahead of the Fed’s next meeting on December 17-18, this PCE report will be the last before the meeting.

Recent persistent inflation data has prompted the Fed to adopt a cautious approach to further interest rate cuts, raising doubts about whether the central bank will reduce rates in December.

Retail Sector in Focus

The retail sector will dominate corporate news this week, with the Thanksgiving holiday on Thursday and Black Friday marking the start of the holiday shopping season.

A fresh round of retail earnings begins Monday with Bath & Body Works (BBWI), followed by reports from Best Buy (BBY), Macy’s (M), Nordstrom (JWN), and Urban Outfitters (URBN) throughout the week.

Last week, results from two major retailers provided contrasting perspectives. On Tuesday, Walmart (WMT) raised its annual sales and profit estimates for the third consecutive time, while Target (TGT) shares tumbled on Wednesday after reporting weaker-than-expected comparable sales and profit estimates for the holiday quarter.

Investors are closely monitoring how inflation might affect consumer spending, which accounts for more than two-thirds of U.S. economic activity.

Crude Oil Prices Retreat on Ceasefire Expectations

Crude oil prices fell on Monday, giving up some of the previous week’s solid gains, as hopes for a ceasefire in the oil-rich Middle East gained traction.

Axios reported Sunday that Israel and Hezbollah are nearing a ceasefire agreement to end hostilities in Lebanon, citing Israeli and U.S. officials. Additionally, The Times of Israel noted that Israeli Prime Minister Benjamin Netanyahu is engaged in high-level talks regarding the agreement, brokered by U.S. officials.

A potential ceasefire between Israel and Hezbollah could ease Middle East tensions, reducing the risk premium for oil and reflecting a stabilizing geopolitical outlook.