Stocks closed broadly on Wall Street on Wednesday after President Donald Trump backed down on his decision to stop talks on another rescue effort for the economy.
The S&P 500 climbed 1.7% after Trump sent a series of tweets late Tuesday, saying he is open to sending $ 1,200 payments to Americans, along with limited programs to run the airline industry and small businesses. .
The tweet came hours after Trump suddenly announced the market was accompanied by a tweet that his delegates should halt negotiations with Democrats on an effort to broaden the economy after the election, stating that the House Speaker Nancy Pelosi spoke in bad faith. The stakes are high, as economists, investors and the Federal Reserve chair all say the economy needs another dose of support after the end of Congress’s weekly unemployment benefit and other stimulus approved earlier this year .
“Everything we have seen in the last 24 hours just confirms that the market is really addicted to incentives from the government,” said IndexIQ Chief Investment Officer Sal Bruno. When it feels like it can’t be found, it stops. And when there seems to be a possibility for this, it increases, as we have seen today. ”
The S&P 500 index rose 58.50 points to 3,419.45, while the Dow Jones Industrial Average rose 530.70 points, or 1.9%, to 28,303.46.
The Nasdaq Composite climbed 210 points, or 1.9%, to 11,364.60 points despite dominating Democratic lawmakers for Congress, which dominates Big Tech companies and other indices. The proposal, which follows a 15-month investigation by a House Judiciary Committee panel, could make it harder for Amazon, Apple, Facebook and Google’s parent company to implement new rules to acquire others and secure competition.
Amazon rose 3.1%, and Apple climbed 1.7%. Google’s parent company slipped 0.6% and Facebook slipped 0.2%.
Nevertheless, much of the market’s focus is on prospects for more stimulus for the economy than Washington. Wednesday’s gains helped the S&P 500 recover all of its losses from a day earlier, when Trump’s tweet suddenly sent it from a 0.7% gain to a 1.4% loss.
Just hours before Trump announced a halt to negotiations on Tuesday, Federal Reserve President Jerome Powell asked Congress to come up with more aid. He said very little support would “create unnecessary hardship, which would create unnecessary hardship.”
Some analysts portrayed Trump’s move as a compromise negotiation.
Jeffrey Haley of Onda, a trading and research firm, said, “I don’t believe the hope for an incentive deal is gone forever.” “One of Mr. Trump’s favorite negotiating tactics, given past actions, is to walk suddenly off the negotiating table.” Intended to intimidate the other party with concessions. ”
In the long term, many investors say that despite what Trump says, a larger stimulus package may still be possible. A Democratic sweep of the upcoming elections will pave the way for a larger government program after the transfer of power, and Wall Street has begun to see a blue wave more than before.
Airlines trumped some big gains throughout the day after Trump soloed the industry, giving Congress $ 25 billion in approval for “IMMEDIATELY”. Last week, Pelosi promised airline officials to stop the furloughs of thousands of workers to help them, which was imminent for them, although a proposal by the Housing Democrats to give $ 28.8 billion to the airline industry would go ahead Failed
United Airlines Holdings and American Airlines Group climbed 4.3%. Delta Air Lines drew 3.5% more.
The S&P 500 grew widely, with technology shares leading to the biggest gains. Other sectors that would benefit the most from a strong economy were also climbing, including retailers and travel-related companies.
Barry Bannister, head of institutional equity strategy at Stifel, said, “There has been a steady decline in the market leading to long-term growth stocks.” “The big question is whether we are going to see some signs of a change for the economic development beneficiaries.”
Small stocks also grew higher than the rest of the market, indicating growing optimism about the economy’s prospects. The Russell 2000 index of small-cap stocks climbed 33.75 points, or 2.1%, to 1,611.04