Financial markets rallied in the first trading session following President-elect Donald Trump’s nomination of Wall Street veteran Scott Bessent as Treasury secretary, as investors welcomed the nod of the “business-as-usual” Bessent amid a booming stock market.
Traders work the floor of the New York Stock Exchange.
Both of the most cited U.S. stock indexes hit all-time highs Monday morning: The blue chip Dow Jones Industrial Average rose 440 points, or 1% and the benchmark S&P 500 climbed 0.6%, while the tech-concentrated Nasdaq rose 0.5% to just shy of a record.
Perhaps more prescient in the positive reaction to the Bessent choice was the constructive move in the bond market.
Yields for 10-year U.S. government bonds slipped more than 10 basis points to a 2.5-week low of below 4.3% – lower bond yields mean more valuable bonds, indicating fixed income traders demand a lesser interest payout to hold government debt.
Bessent, who would become the person most directly in charge of the U.S.’ balance sheet, is “known to be a fiscal hawk” so the “market can be a bit relieved” from its “more extreme deficit fears,” explained Deutsche Bank strategists led by Jim Reid in a Monday note to clients.
“While Bessent has already pledged to uphold Trump's promises for tariffs and tax cuts, he is considered to be a thoughtful moderate,” added Siebert chief investment officer Mark Malek in emailed comments, predicting a “more measured approach when it comes to policy deployment” of Trump’s economic agenda.
Bessent, who told Forbes earlier this month Trump “is very sophisticated on economic policy,” will take over a federal government with a sizable debt burden. The record $36 trillion national debt is a near 30% increase from when President Joe Biden took office, slightly less than the almost 40% jump during Trump’s first term. The hedge fund veteran Bessent emerged from a crowded field from potential candidates for the Treasury chief position, with other candidates including fellow corporate finance bigwigs like Howard Lutnick and Marc Rowan and former Federal Reserve official Kevin Warsh.
Elon Musk, the richest person in the world and arguably Trump’s closest associate, spoke out against Bessent as a Treasury boss candidate, slamming Bessent as a “business-as-usual” choice for the role in a Nov. 16 social media post. But the “market will probably be more appreciative of this trait” from Bessent, remarked the Deutsche Bank group Monday.
6%. That’s how much the Dow is up since Election Day. Its 7.2% rally dating back to Halloween has the index on track for its best month since last November.