S&P 500 Climbs Amid Financial Sector Rally, Solar Stocks Decline Post-Election
Explore how the S&P 500 surged following the election results, with financial stocks leading gains and solar shares falling as market focus shifts to the upcoming Federal Reserve rate decision.
Michael Bromberg brings over ten years of expertise as a finance editor, specializing in simplifying intricate financial concepts into accessible language. He holds a Bachelor of Arts in literature from the University of Wisconsin-Madison and a master's degree in linguistics from Universidad de Antioquia in Medellin, Colombia.
Highlights
- On Wednesday, Nov. 6, the S&P 500 surged 2.5% as investors digested election outcomes and anticipated the Federal Reserve's rate announcement slated for Thursday.
- Shares of Discover Financial soared, fueled by optimism over regulatory approval of its proposed merger with Capital One.
- Steel producer Nucor also saw gains, while solar sector stocks retreated following election news.
Major U.S. stock indices hit record levels as the presidential election results provided clearer insight into the nation’s economic direction in the years ahead. With political uncertainty easing, market participants are now focusing on the Federal Reserve’s imminent interest rate decision.
The S&P 500 climbed 2.5%, the Nasdaq advanced 3.0%, and the Dow surged 3.6% on Wednesday.
Financial sector companies, particularly credit card issuers, led the market rally post-election. Discover Financial Services (DFS) experienced a 20.2% jump, marking the largest gain among S&P 500 stocks. This surge reflects growing confidence in the merger approval prospects with Capital One (COF), whose shares rose 15.0%. Similarly, Synchrony Financial (SYF), known for retail credit cards, increased by 18.8%.
Trimble (TRMB) shares rose 17.9% following strong third-quarter earnings and sales driven by subscriptions and software services, prompting an upward revision of full-year guidance amid improving client spending trends.
Steelmakers benefited from expectations that a Trump administration might implement more protective policies for the domestic steel industry, with Nucor (NUE) shares climbing 16.0%.
Conversely, Super Micro Computer (SMCI) saw its shares plunge 18.1% after announcing uncertainty around the release date of its delayed 2024 annual report. The departure of accounting firm EY and Nasdaq's warning about compliance issues heightened concerns about potential delisting.
Solar stocks dipped as reports favored Trump's election win, given his commitment to reversing Biden-era renewable energy policies. Enphase Energy (ENPH) shares fell 16.8%, while First Solar (FSLR) declined 10.1%.
Despite International Flavors & Fragrances (IFF) surpassing third-quarter revenue expectations, its earnings per share missed forecasts, resulting in an 11.6% drop in its stock price.
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