The Dow Jones Industrial Average gained 0.38%, and the S&P 500 advanced 0.07%
Stocks rose on Wednesday as investors waved away a threat by U.S. President Donald Trump not to sign a bill including nearly $900 billion in pandemic relief, while the British pound soared on rising expectations of a Brexit trade deal.
In a video posted on Twitter, Trump said the stimulus package, agreed upon after months of wrangling in Congress, was “a disgrace” and that he wanted to increase “ridiculously low” $600 payments for individuals to $2,000.
The benchmark S&P 500 U.S. stock index nonetheless advanced as cyclical sectors such as energy and financials, expected to benefit most from an economic recovery, led in percentage gains.
Market analysts said they still believed fiscal stimulus would come soon, whether under Trump, a Republican, or President-elect Joe Biden, a Democrat. Some investors could be holding out hope for even more aid given Trump’s remarks, said Phil Orlando, chief equity market strategist at Federated Hermes.
The Street must be thinking, ‘Alright, we’ll get a bigger stimulus,’ he said. Republicans have the president’s cover to sit down and negotiate a bigger deal.
On Wall Street, the Dow Jones Industrial Average rose 114.32 points, or 0.38%, to 30,129.83, the S&P 500 gained 2.75 points, or 0.07%, to 3,690.01 and the Nasdaq Composite dropped 36.80 points, or 0.29%, to 12,771.11.
Foreign exchange markets broadly reflected optimism toward U.S. fiscal stimulus and global growth. The euro rose 0.24% to $1.2191, while the Australian dollar, considered a riskier currency, advanced 0.8% to $0.758.
Conversely, the dollar index, which measures the safe-haven currency’s performance against a basket of other major currencies, fell 0.14%. The dollar index has weakened more than 6% this year as investors bet the U.S. Federal Reserve will keep its monetary policy ultra-accommodative.
With a Brexit trade deal seeming likely, “investors are looking once again to recovery,” said Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions. It was being held up by the trade dynamic between Britain and the EU.
The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.
Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.
Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.