US stocks soared to record highs on Friday, capping the best week of the year, as investors reacted positively to Donald Trump's victory in the US presidential election. The S&P 500 increased by 0.38%, briefly surpassing 6,000 points for the first time in history, before ending the day at approximately 5,996. The Dow Jones Industrial Average rose by around 260 points, or 0.59%, breaking past a record 44,000 points before settling at 43,989. Both indices enjoyed their most successful week within the last twelve months.

The technology-centric Nasdaq Composite also witnessed gains, increasing by about 0.09% on Friday, following its historic peak of 19,000 points on Wednesday. The US dollar experienced a slight uptick after a week of rallying, while Treasury yields dipped slightly. Investors are now assessing how Trump's reelection might reshape the US business environment, particularly in light of his campaign's promises, such as lowering the corporate tax rate.

Michael Block, COO at AgentSmyth, highlighted the market's optimism: "There is a significant perception of an upcoming business-friendly, tax-friendly regime, especially with the Republicans securing the Senate." The market's historic gains were largely fueled by a substantial post-election rally on Wednesday, with the Dow Jones Industrial Average surging 1,507 points, or 3.57%, marking the first time it gained over 1,000 points in a single day since November 2022.

The swift clarity provided by Trump's decisive victory in the electoral college has been a boon for markets, which typically dislike uncertainty. As Trump's reelection provided earlier-than-expected clarity, investors flocked to US stocks. Markets had been concerned about potential disputes over the election results, which had previously overshadowed investor sentiment. Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, noted that the swift resolution led to investor comfort: "Historically, you see a pre-election dip, followed by a post-clarity bump. Clarity leads to increased confidence."

The Federal Reserve's expected quarter-point interest rate cut on Thursday also contributed to investor optimism. Stocks anticipated to thrive under Trump's administration, such as Trump Media & Technology and private prison operator GEO Group, saw significant gains. Tesla, led by Elon Musk, who supported Trump's campaign, rose 8.18% on Friday, ending the week with a 32.27% increase and surpassing a $1 trillion valuation for the first time since 2022.

Bitcoin also reached an all-time high, breaking past 77,000 for the first time on Friday, as markets anticipated Trump's pro-cryptocurrency stance. However, market movements are subject to investor sentiment, and the week's historic gains may not be sustained. JPMorgan analysts predicted that under a "red wave," stocks could gain through the end of 2024, but policy execution uncertainty could increase in 2025.

Art Hogan, chief market strategist at B Riley Wealth Management, commented on the market's extreme reaction: "The market is responding to the election of a business-friendly president. The initial enthusiasm for a Trump administration may be short-lived."