DJIA added 0.78%, the S&P 500 advanced 0.99% and the Nasdaq Composite gained 0.97%
Wall Street was on track to close at record highs on Monday, but crude prices lost ground as long-awaited pandemic relief and Brexit trade deals fuelled investors’ risk appetite.
U.S. equities followed the example of their European counterparts with a broad rally, and communications services and consumer discretionary stocks were leading the charge.
But crude prices slumped as weak demand and a potential increase in production offset the effects of the fiscal aid package.
President Donald Trump reversed course on Sunday by signing a $2.3 trillion stimulus and spending package into law, heading off a potential government shutdown and setting the stage for congressional Democrats to push for more robust direct payments of $2,000 to millions of Americans.
Americans are riding the coattails of the additional stimulus program and that is for good reason, said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis. If you look to year-end, it will be a fairly light trading week but we seem poised to end the year on a high note.
While Wall Street still faces some uncertainties, Sandven sees conditions remaining favourable as we enter 2021.
Medical progress for COVID-19 continues to evolve and that will unfold at a more accelerated rate now as you get into the new year, Sandven added. And importantly, the macro environment is favourable for stocks.
Dow Jones Industrial Average rose 235.6 points, or 0.78%, to 30,435.47, the S&P 500 gained 36.57 points, or 0.99%, to 3,739.63 and the Nasdaq Composite added 124.46 points, or 0.97%, to 12,929.20.
U.S. Treasury yields rose early in the session but gave up much of those gains by late afternoon as the risk-on rally lost some steam. 10-year notes last fell 2/32 in price to yield 0.9364%, from 0.93% late on Thursday.
The 30-year bond last fell 6/32 in price to yield 1.6743%, from 1.666% late on Thursday.
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