Stocks soared across Monday on Wall Street, with traders hailing the fall in long-term interest rates in the bond market. Investors also watched Washington, DC, as a major economic stimulus bill was sent to the Senate.
The S&P 500 amounted to about 2.4% on Monday. More than 95% of the index’s shares were up on Monday, led by energy and technology companies. The Dow Jones Industrial Average rose just over 600 points, or nearly 2%, to 31,535, and the high-tech compound Nasdaq rose 3%.
Much of the focus on Wall Street was in the bond market, with the yield on the 10-year Treasury note falling to 1.45%, after rising to 1.5% last week, the highest level in more than a year. . Higher interest rates can slow the economy and discourage indebtedness.
Bond yields, which influence interest rates on mortgages and many other types of loans, steadily increased in 2021, as investors bet that the government’s vaccination efforts and further stimulus will lead to strong economic growth in the end this year. However, along with strong economic growth come concerns about inflation.
A handful of senior Federal Reserve officials will make speeches this week that should give investors additional information about the country’s central bank’s concern about the economy and the threat of inflation. Lael Brainard, a supporter of more flexible monetary policies to spur job growth, will give a speech on monetary policy on Tuesday and Fed Chairman Jerome Powell will give a speech on Thursday.
The House of Representatives approved Biden’s $ 1.9 trillion pandemic relief bill on Friday and is now going to the Senate for approval. The project infuses money across the struggling economy for individuals, businesses, schools, states and cities hit by COVID-19.
The stimulus project is expected to include another round of one-time payments of $ 1,400 for most Americans, including an expansion of other reimbursable tax credits, such as the tax credit for children, and additional help for state and local governments to combat the pandemic.
The combination of the vaccine launch, stimulus payments and high consumer savings as a result of the fiscal stimulus could spur economic recovery, according to analysts at Goldman Sachs in a March 1 research note.
Johnson & Johnson’s stock price rose 1.5% after the US Food and Drug Administration approved the company’s own coronavirus vaccine, which does not require extensive refrigeration like those made by Moderna and Pfizer.
Energy companies made some of the biggest gains on Monday. Exxon Mobil rose 3.7% and Occidental Petroleum rose 3.9%. Industrial companies, including airlines hit by the coronavirus pandemic, have also helped boost the broader market. United Airlines grew 1.2%.
Investors will receive several important economic reports this week, including the February jobs report on Friday. On Monday, a manufacturing report came out better than expected, and new orders also came out better than expected.