Stock markets rose on Wall Street on Monday, while traders welcomed a drop in long-term interest rates on the bond market. Investors also watched Washington, DC, as a major economic stimulus bill moves into the Senate.
The S&P 500 added about 2.4% on Monday. Over 95% of the stocks in the index were higher on Monday, led by energy and technology companies. The Dow Jones industrial average rose just over 600 points, or almost 2%, to 31,535, and the heavy-tech Nasdaq composite rose 3%.
Much of the focus on Wall Street has focused on the bond market, with 10-year treasury yields falling to 1.45% after reaching 1.5% last week, the highest level in more than a quarter. year. Higher interest rates can slow down the economy and discourage lending.
Bond yields, which affect interest rates on mortgages and many other types of lending, have risen steadily for much of 2021, until investors bet that vaccination efforts and more government stimulus will lead to strong economic growth at the end of the year. this year. However, along with strong economic growth, there is also inflation.
A handful of senior Federal Reserve officials will deliver speeches this week, which should provide investors with more information on how worried the nation’s central banker is about the economy and the threat of inflation. Lael Brainard, a weaker monetary policy advocate to boost job growth, will deliver a monetary policy speech on Tuesday, and Fed Chairman Jerome Powell will deliver a speech on Thursday.
The House of Representatives on Friday approved Biden’s $ 1.9 trillion pandemic bailout bill and is now going to the Senate for approval. The bill infuses cash into the entire troubled economy of individuals, businesses, schools, states and cities beaten by COVID-19.
The stimulus bill is expected to include another round of $ 1,400 single payments to most Americans, including an extension of other repayable tax credits, such as the child tax credit and additional aid to state and local governments for combating the pandemic.
The combination of vaccine launches, incentive payments and increased consumer savings as a result of the fiscal stimulus could lead to economic recovery, according to Goldman Sachs analysts in a March 1 research note.
Johnson & Johnson’s share price rose 1.5 percent after the U.S. Food and Drug Administration approved its own coronavirus vaccine, one that does not require extensive refrigeration, such as those produced by Moderna and Pfizer.
Energy companies posted 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 contributed to the growth of the wider market. United Airlines rose 1.2%.
Investors will receive some important economic reports this week, including the February job report on Friday. On Monday, a production report came in better than expected, and new orders also came in better than expected.