Shares are rising sharply on Wall Street as traders welcome a drop in long-term interest rates in the bond market. Investors were also watching Washington move a major economic stimulus bill into the Senate.
The S&P 500 added about 2.5% as of 2 p.m. Eastern time. More than 95% of the index’s shares were higher on Monday, led by energy and technology companies. The Dow Jones Industrial Average rose around 675 points, or nearly 2.2%, to 31,606, and the Nasdaq Composite rose 2.6%.
Much of the focus on Wall Street is on the bond market, with the yield on the 10-year Treasury bill falling to 1.43% after reaching 1.5% last week , the highest level in more than a year. Higher interest rates can slow the economy and discourage debt.
Bond yields, which influence mortgage interest rates and many other types of lending, have been steadily rising for most of the year, as investors have bet that vaccination efforts and more stimulus government will lead to strong economic growth this year. However, along with strong economic growth appear inflation concerns.
A number of senior Federal Reserve officials are delivering speeches this week that are expected to give investors additional information about the country’s central bank concern about the economy and inflation. Lael Brainard, a proponent of weaker monetary policy, will deliver a speech on monetary policy on Tuesday and Fed Chairman Jerome Powell on Thursday.
The House of Representatives on Friday passed Biden’s $ 1.9 trillion pandemic relief bill and it is now in the Senate for approval. The bill provides cash to the entire troubled economy to people, businesses, schools, states and cities abused by COVID-19.
The stimulus bill is expected to include another round of one-time payments of $ 1,400 to most Americans, including an extension of other repayable tax credits such as the child tax credit and additional aid to state governments and premises to combat the pandemic.
Johnson & Johnson’s share price rose 1.5% after the U.S. Food and Drug Administration approved the company’s own coronavirus vaccine, which does not require extensive refrigeration like the manufactured ones. for Modern and Pfizer.
Energy companies made some of the biggest gains. Exxon Mobil rose 5% and Occidental Petroleum 4.9%. Industrial companies, including airlines defeated by the virus pandemic, also helped boost the market as a whole. United Airlines rose 3.4%.
Investors will receive several major economic reports this week, including the February-Friday job report. On Monday, a manufacturing report came in better than expected and new orders also came in better than expected.