Wall Street hit record heights today as Joe Biden’s inauguration as the 46th US President lifted hopes that his $1.9 trillion stimulus plan would help settle a tumultuous global economy.
The tech-focused Nasdaq rose as much as 1.6 per cent during trading, before settling 260 points up at market close to a fresh peak.
It came as Biden wasted little time in getting round to signing executive actions to address the pandemic, fraught economy, climate change and racial equity. after entering the White House
Biden’s commitment to “bring [America’s] uncivil war to an end” in his first speech as the country’s President helped boost global currencies, hiking GBP to an 18-month high.
The benchmark S&P 500 index gained 1.4 per cent to reach a new record, following a strong close on Tuesday after Treasury secretary nominee Janet Yellen urged Congress to “act big” on stimulus.
Yellen said that the benefits of a hefty stimulus package outweighed the problems of growing debt burden. Her words seemed to have an almost instant effect, with Wall Street’s biggest markets posting solid gains.
Eight of the 11 S&P sectors closed in the green, with technology, communication services and consumer discretionary among the biggest gainers.
The Dow Jones rose 0.8 per cent, or 258 points, meaning all three main US indexes bagged record heights on Wednesday.
FTSE fails to feel the fire
Biden’s entry to the White House electrified global markets, and helped boost GBP to an 18-month high of $1.37.
London’s FTSE 100 index closed up 0.4 per cent, while the domestically-focussed FTSE 250 index added 1.4 per cent.
Education group Pearson led the way, with shares up 8.6 per cent after it announced online sales grew 18 per cent in 2020, as children stayed at home during the pandemic.
Burberry also picked up 3.3 per cent despite a slight fall in sales, as it noted Asian demand remained strong.
The FTSE 250 of midcap firms rose 1.0 per cent to 20,661, led by a 10.4 per cent jump at WHS Smith.
Despite a rapid rally in the first week of the year, the FTSE has been treading water for several weeks as traders await details of the new Biden administration’s plans for the economy.
And despite this morning’s rise, it is still trailing behind continental rivals, as it did for most of last year.
Germany’s DAX closed up 0.8 per cent, while the French CAC hiked 0.5 per cent, led by luxury fashion brand LMVH.
US celebration crosses the Pacific
The surge continued across Asia-Pacific markets overnight, with some bourses reaching record highs.
MSCI’s Asia-Pacific index outside Japan rose 0.8 per cent , reaching its highest level ever.
Hong Kong’s Hang Seng rose 1.0 per cent to edge near its 2019 peak while Australian shares added 0.4 per cent, reaching a record high . Japan’s Nikkei, however, slipped 0.5 per cent on profit-taking.