Monday's surge in U.S. equities indices was driven by investor hope following the nomination of Scott Bessent as Treasury Secretary.
Bond yields dropped; the two-year yield dropped to 4.30% and the 10-year Treasury yield dropped to 4.29%. To signal further economic slowdown, the Chicago Federal Reserve National Activity Index slipped even farther into negative territory in October. The gains tracked Friday's surge in consumer-related companies and industries connected to Trump administration policy advancement.
Markets saw Bessent's appointment favorably, reading it as evidence of consistent policy. "Markets welcomed Trump's nomination of financier Bessent as Treasury Secretary. From economic policy, investors want consistency, clarity, and orthodoxy—predictability—UBS economist Paul Donovan stated.
In line with Trump's first-term approach, hedge fund manager Bessent has advocated the use of trade tariffs as a bargaining tool. Although this position has generated conflicting views inside the government, investors applauded his reasonable attitude toward trade problems.
