Election rally: S&P +5.7%, small caps lead on Trump win

November 2024 was defined by the presidential election and the decisive post-election rally. The week of November 4-8 delivered the majority of the monthly gain: S&P 500 +4.7%, small caps +8.6%, Bitcoin +12% on the Trump victory and clean Republican sweep. Markets quickly repriced deregulation expectations, tariff uncertainty (positive for domestic producers), and the policy regime change. The November 7 FOMC delivered 25 bp cut on schedule, providing additional tailwind.

Mid-month consolidation was orderly. The S&P 500 traded in a narrow range through November 15-22 as markets digested the election outcome and positioned for year-end. Thanksgiving week saw typical low-volume drift higher. The November 27 PCE print at 2.3% core was in-line, maintaining the Fed's glide path to continued cuts.

The month's cross-asset story reflected the policy regime reset. The dollar strengthened (DXY +1.9%) on growth divergence expectations. The 10Y yield declined modestly to 4.17% as cyclical narrative moderated. Bitcoin closed at $95,000, up 37% on the month, a historic gain driven by crypto-friendly Trump administration expectations and spot ETF inflows. Small caps outperformed large by 3 percentage points. Sector rotation saw financials (+10%) and industrials (+8%) lead.