Tourists take a picture with the market bull near the New York Stock Exchange.
Forward contracts linked to major U.S. stock indices rose Thursday night just hours after the S&P 500 closed at a record high and President Joe Biden signed scientific stimulus legislation.
Dow futures added 60 points and suggested a profit of a similar magnitude when regular trading resumed Friday. Nasdaq 100 and S&P 500 futures both added about 0.2%.
U.S. stocks climbed to a record high during Thursday’s regular session when a boom in technology stocks resumed and Biden’s $ 1.9 billion Covid-19 aid package became law. The S&P 500 jumped 1% and reached a new high, surpassing the previous record from 16 February.
The Dow Jones industrial average, the relative deficit, scored 188.57 points after gaining more than 300 points to an intraday record earlier in the session.
“While we expect conditions to remain volatile, the latest developments point to three of the key market drivers – stimulus, pandemic news and inflation data – on further upside stocks,” wrote Mark Haefele, chief investment officer of UBS Global Wealth Management.
“The stimulus is significantly larger than expected earlier in the year. Its provision is also likely to be very supportive of consumption and growth,” he added, referring to the stimulus. “This windfall comes in addition to the existing signs of pent-up demand from U.S. consumers.”
While the S&P 500 set a new closing record, the Nasdaq Composite achieved the best profit of the day, rising 2.5% amid a return to popular technology stocks. The movements that had the index higher have a rise of 4.7% in Tesla and a rise of at least 3% in Apple, Facebook, Alphabet and Netflix.
The Nasdaq is wiping out a 10% correction it suffered earlier this month and remains 5.48% below its own record set in February.
A rapid rise in bond yields put the technology index under pressure earlier in March as investors moved to economically sensitive, cyclical stocks. Sharp rise in interest rates could put huge pressure on technology stocks as it reduces the relative value of future gains.
It appears that the trend partially reversed on Thursday as bond yields calmed down; the Nasdaq has risen 3.7% so far this week and is better than the S&P 500 and the Dow over the period. The ten-year treasury yield, which peaked at about 1.6% this month, was seen just north of 1.53%.
Signs that the US economy could be set for a healthy 2021 were plentiful on Thursday after Biden signed its long-awaited $ 1.9 billion coronavirus relief package. The plan will send direct payments of up to $ 1,400 to many Americans, and will also bring in nearly $ 20 billion in Covid-19 vaccinations and $ 350 billion in state, local and tribal government assistance.
Biden announced Thursday night that he would order countries to qualify all adults for the vaccine by May 1 in his first speech as president.
Investors also cheered a little better than expected reading on weekly unemployment claims that showed a decline in the number of first-time unemployment benefit applicants.