Stocks rallied toward a record a day after violence rocked the U.S. Capitol, with investors firmly focused on the prospect for more economic stimulus and the likelihood that calm will prevail as Joe Biden takes the presidency.
The S&P 500 extended gains into a third day, led by financial and technology companies. The Nasdaq 100 climbed 2% amid a jump in giants such as Apple Inc. and Facebook Inc, while Tesla Inc. surged after RBC Capital Markets upgraded the stock, noting that it was “completely wrong” with a previous bearish view. Banks rose as Goldman Sachs Group Inc. said the industry has “moved back into vogue.” Treasury yields held above 1% as the dollar advanced.
Democrats are set to take control of the Senate, House and presidency, paving the way for Biden to bring his legislative agenda to life and reshape the economy. He was recognized by Congress as the next president following a day of violence at the U.S. Capitol when pro-Donald Trump demonstrators breached police lines and entered the building. While campaigning in Georgia before the runoff elections, Biden vowed that $2,000 stimulus checks would be sent out “immediately” if Democrats won the state.
“Markets (rightly, in our view) see the U.S. government as ultimately a stable-enough set of institutions even if things occasionally go pear-shaped,” Nick Colas, co-founder of DataTrek Research, wrote in a note. “Politics play second fiddle to economic and corporate fundamentals when it comes to setting asset prices,” he added. “It means that the country’s economic future coming out of the pandemic remains promising.”
In economic news, growth at U.S. service providers unexpectedly accelerated in December as gains in business activity and new orders helped offset a decline in a measure of employment. Meanwhile, unemployment claims figures underscored a labor-market rebound that remains fragile, with Friday’s jobs report forecast to show a sharp slowdown in December hiring.
Elsewhere, the total market value of cryptocurrencies surpassed $1 trillion for the first time Thursday amid a frenzied and volatile rally in Bitcoin to yet another record, topping $38,000.
These are some of the main moves in markets:
- The S&P 500 rose 1.4% as of 10:07 a.m. New York time.
- The Stoxx Europe 600 Index gained 0.4%.
- The MSCI Asia Pacific Index climbed 0.8%.
- The Bloomberg Dollar Spot Index increased 0.4%.
- The euro fell 0.4% to $1.2278.
- The Japanese yen depreciated 0.6% to 103.65 per dollar.
- The yield on 10-year Treasuries rose four basis points to 1.08%.
- Germany’s 10-year yield gained one basis point to -0.51%.
- Britain’s 10-year yield gained four basis points to 0.286%.
- West Texas Intermediate crude rose 0.1% to $50.70 a barrel.
- Gold was little changed at $1,918.99 an ounce.
–With assistance from Gregor Stuart Hunter, Andreea Papuc, Anchalee Worrachate, Claire Ballentine and Katherine Greifeld.
–By Rita Nazareth and Lu Wang