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Here's a look at what we think is driving the stock market's impressive rally on Election Day

By John Fenwick

November 6, 2024November 6, 2024

3 minutes, 21 seconds Read

Every weekday, CNBC Investing Club with Jim Cramer publishes Homestretch – an actionable afternoon update just in time for the final hour of trading on Wall Street. Market Rally: Stocks were consistently strong on Tuesday, with all 11 market sectors in the green. The S&P 500 rose more than 1%. Voting for President on Election Day is in full swing. Control of Congress is also at stake, with all 435 seats in the House of Representatives and a third of the 100-member Senate up for election. The market rally could be an indication that investors are seeing the light at the end of clearing the electoral overhang. I may also be guided by the continued economic strength and positive corporate profits. You can see the session's momentum picked up at 10 a.m. ET following strong October data on the services sector of the economy. The monthly purchasing and supply ladder reading was the highest since July 2022 and showed an increase for the 50th time in 53 months. The economic narrative of “soft landing” or even “no landing” is back in full swing. Stable interest rates: Despite these positive economic data, all signals continue to point to the Federal Reserve cutting interest rates by 25 basis points at the Federal Open Market Committee's November meeting on Thursday. While the 10-year Treasury yield has risen recently on fears that the Fed's rate cuts will spur inflation again, it remained relatively unchanged on Tuesday. Bond yields initially rose in response to these services numbers. However, they retreated after the market successfully weathered the second of its three major Treasury auctions this week. An auction of three-year notes worth $58 billion took place on Monday. An auction of $42 billion in 10-year notes was held on Tuesday. Next Wednesday, $25 billion in 30-year bonds will hit the market. Sector Moves: The top three performing sectors on Tuesday were consumer discretionary, industrials and information technology. Energy, materials and consumer staples, while up in the session, were in the bottom three. The materials sector was weak due to a more than 20% sell-off in Celanese shares after the company issued a poor outlook. The chemical manufacturer's forecast led to weakness in the automotive markets. The sector's top performer, club name DuPont, rose more than 6% after a strong earnings report and a forecast upgrade, as well as a tighter timeline for its split into three companies. You may recall that in November 2022, DuPont sold its Mobility & Materials segment, which was primarily focused on the automotive industry, to Celanese for $11 billion in cash to focus more on electronics, water quality and industrial technologies. After its takeover of Rogers Corporation fell through due to regulatory hurdles, DuPont took the sale proceeds and bought back billions of dollars' worth of stock at a much lower price. Based on the two companies' divergence on Tuesday, it's clear that DuPont got a good trade. Next up: After the closing bell we'll see earnings from Devon Energy and International Flavors & Fragrances. Super Micro Computer will also report. Before the opening bell on Wednesday, we get the latest quarterly results from Novo Nordisk, CVS Health, Howmet Aerospace and Celsius Holdings. (A complete list of Jim Cramer's Charitable Trust stocks can be found here.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable foundation's portfolio. If Jim discussed a stock on CNBC television, he waits 72 hours after the trade alert is issued before executing the trade. THE INVESTING CLUB INFORMATION SET FORTH ABOVE IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, ALONG WITH OUR DISCLAIMER. THERE ARE NO fiduciary duty or duty IN RECEIVING YOUR INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.

Every weekday, CNBC Investing Club with Jim Cramer publishes Homestretch – an actionable afternoon update just in time for the final hour of trading on Wall Street.

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