Stocks Close on Record Highs Following Biden Inauguration
Stimulus hopes and a pledge to bring unity to the US appeared to buoy global investor confidence.
European and US markets saw a surge on Wednesday as Joe Biden was officially sworn in as the 46th US president.
The Dow Jones, S&P 500 and Nasdaq each hit new records as markets closed. After making gains on Tuesday as Treasury secretary nominee Janet Yellen urged Congress to “act big” on economic stimulus, the S&P 500 ended 1.4% up in a closing record.
The tech-heavy Nasdaq index was also boosted 2%, aided by a jump in Netflix stock as the company suggested share buybacks to come.
European stocks opened higher on Thursday morning, with the FTSE 100, CAC 40 and DAX respectively gaining 0.4%, 0.% and 0.6%. US markets also appeared ready to hit further peaks, with Dow Jones, S&P 500 and Nasdaq futures respectively up 0.2%, 0.3% and 0.6%.
Asian stocks also hit record highs overnight. Japan’s Nikkei rose 0.8%, while Korea’s Kospi rose 1.5% and Chinese blue-chip stocks added 1.75%.
Traders’ optimism was owed in large part to Biden’s proposed $1.9 billion stimulus package and was probably not hurt by his inauguration speech focused on “bringing the country back together”, according to CMC Markets UK’s chief market analyst, Michael Hewson.
The stimulus package would bring a raft of measures intended to support citizens and businesses impacted by the COVID-19 pandemic, with the issuing of $1,400 payments to eligible persons being its flagship feature. Also on the table are a temporary increase of tax credits, subsidies for health insurance premiums, and a new grant program for small business owners separate from the existing Paycheck Protection Program.
The newly inaugurated president has also stated that a second spending plan will arrive “in the first few weeks” of his term, likely introducing new measures to create jobs and reform infrastructure.