Donald Trump's surprise victory in a tight presidential election defied Wall Street expectations, not only regarding who would lead the country, but the market's reaction to that leader.

Instead of latching onto the uncertainties, the market vaulted higher on the president-elect's promise of changing the tax code and launching a huge spending program to stimulate the economy. Interest rates rose and market talk turned to inflation and higher growth.

Trump's transition will be a big focus for markets in the week ahead, and of particular interest will be any guidance on whom he plans to name for key Cabinet jobs. Some of those names could be market moving, given the emphasis during the campaign on things like trade and deregulation. There is also a busy economic calendar, with the highlights both Tuesday's retail sales report and CPI inflation data Thursday.

The retail sales data and also the comments from merchants, who report earnings during the week, could provide important insights into how consumers weathered the election season. Retailers reporting earnings include Home Depot on Tuesday, Target on Wednesday and Wal-Mart on Thursday.

Stocks in the past week surged, with the Dow rallying 5 percent to a new high, its best gain in five years. The Dow ended Friday at 18.847, and the S&P 500 was up 3.8 percent at 2,164. The Nasdaq was up 3.7 percent, but the small-cap Russell 2000 outperformed with a more than 10 percent gain.

At the same time, US Treasury yields zipped higher, particularly at the long end. The 10-year Treasury yield jumped to 2.15 percent, the highest level since January, from a pre-election level of 1.8 percent.

Literally overnight Tuesday into Wednesday, market sentiment shifted, and so did the stocks that were in favor. Financials ripped higher, up 11.3 percent for the week on the outlook for higher rates and less regulation. That was the best week for the sector since the bull market began in 2009.

Industrials bounced nearly 8 percent, and the Industrial Select SPDR Fund ETF had its best week in five years. Health care jumped 6 percent on Trump's vow to eliminate parts of Obamacare and on relief that Hillary Clinton did not win. She was outspoken on drug pricing and viewed as negative for drugs and biotech. The IBB iShares Nasdaq Biotechnology ETF jumped 14.4 percent in its best week ever.

There was selling in some tech names like Facebook, Amazon.com and Netflix, as investors shifted into new market leadership.

"What you've also done here is you've priced in growth based on a resumption of animal spirits that may or may not occur. The point is what we do know this is a

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First Published:Nov 12, 2016 12:01 PM IST