US stocks surge ahead of Thanksgiving

On Wednesday, stocks experienced a surge following a brief decline in yields to their lowest point in several months, and the market’s rally from November extended into the Thanksgiving holiday.

The S&P 500 increased by 0.4%, the Nasdaq Composite advanced by 0.5%, and the Dow Jones Industrial Average gained 178 points, or 0.5%. The majority of the stocks trading on the New York Stock Exchange were up, suggesting that the market’s rally was becoming more widespread.

Increased participation was also seen on the tech-heavy Nasdaq, where 63.7% of the index’s stocks rose. Wednesday was a better day for small- and mid-cap stocks, up 0.6%.

The postponement by OPEC of a meeting on production cuts that was initially slated for the weekend caused a 0.6% loss in the energy sector on Wednesday. The stocks of Devon Energy, EOG Resources, APA Corp, and Marathon Oil all fell by more than 1%.

The yield on the 10-year Treasury briefly dropped to 4.369%, the lowest since September 22, but it subsequently rose and was last trading at 4.433%, up more than 1 basis point. The 10-year yield has dropped significantly after it crossed the 5% threshold in October for the first time in sixteen years.

In the minutes from its most recent meeting, the Federal Reserve indicated that monetary policy will continue to be tight and that there would be no rate cuts in the near future. Fed funds futures trading indicates that investors are still confident the central bank won’t raise rates at its meeting in December.

After the closing bell on Tuesday, chipmaker Nvidia released its most recent quarterly results. It beat estimates for adjusted earnings and revenue for the fiscal third quarter and warned that export restrictions from China would negatively impact its fiscal fourth quarter. Shares on Wednesday dropped 4.2%.

With the Nasdaq rising 11%, the Dow rising nearly 7%, and the S&P 500 rising more than 8% in November, all three major averages are expected to see monthly gains. Given the continued decline in inflation, this rally may last a little while longer.