Shares rose sharply on Wall Street on Monday as traders welcomed a drop in long-term interest rates in the bond market. Investors also watched Washington, DC, move a major economic stimulus bill to the Senate.
The S&P 500 added about 2.4% on Monday. More than 95% of the index’s shares were higher 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 Nasdaq composite, which has been highly technological, rose 3%.
Much of the attention on Wall Street was focused on the bond market, with the yield on the 10-year Treasury bill falling to 1.45% 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 2021 until investors bet that vaccination efforts and more government stimulus they will lead to strong economic growth later this year. However, along with strong economic growth appear inflation concerns.
A handful of senior Federal Reserve officials will deliver speeches this week that are expected to provide investors with additional information about the nation’s central bankers ’concern about the economy and the threat of inflation. Lael Brainard, a proponent of looser monetary policies to boost employment growth, 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.
According to Goldman Sachs analysts in a March 1 research note, the combination of vaccine deployment, stimulus payments and high consumer savings as a result of the fiscal stimulus could drive the economic recovery.
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 on Monday. Exxon Mobil rose 3.7% and Occidental Petroleum 3.9%. Industrial companies, including airlines defeated by the coronavirus pandemic, also helped boost the overall market. United Airlines rose 1.2%.
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.