U.S. stocks jumped to an all-time high, powered by a renewed rally in tech shares as Treasury yields show signs of stabilizing and a $1.9 trillion spending bill moves closer to law.
The S&P 500 reclaimed a record in a broad rally led by tech and consumer discretionary shares. More than 400 stocks in the benchmark advanced, while the Nasdaq 100 Index surged more than 2% as it continued to rebound from an 11% rout since its February record. Apple Inc. and Tesla Inc. advanced. AMC Entertainment Holdings Inc. jumped after posting a smaller-than-expected loss. GameStop Corp. dropped following a wild day of volatility. Roblox Corp. advanced as Cathie Wood’s Ark Investment Management disclosed a stake in the digital games company that debuted Wednesday.
The 10-year Treasury yield edged up but held below recent highs as investors awaited an auction of 30-year notes. Jobless claims fell more than forecast, signaling labor-market momentum as President Joe Biden prepares to sign the $1.9 trillion spending bill. The dollar slumped versus major peers.
Elsewhere in markets, German 10-year bond yields declined and the Stoxx 600 Index extended gains after the European Central Bank indicated it will step up the pace of bond purchases. Copper climbed above $9,000 a ton in London and oil advanced.
Market sentiment is getting a boost from Wednesday’s weaker-than-expected report on U.S. consumer prices, which eased concern about broader inflationary pressures. Ten-year Treasury yields have steadied around 1.5% in recent days, helping breathe life back into technology stocks that were pummeled over the past month.
Another bullish catalyst for the U.S. market is the $1.9 trillion Covid-19 relief bill, which cleared its final congressional hurdle and will be signed by President Biden on Friday. Most Americans will be receiving direct payments of $1,400, with the money starting to go out within days.
“It is one of the most far-reaching federal relief efforts to ever pass Congress and another reason to be confident of the outlook for U.S. equities,” said Willem Sels, chief investment officer at HSBC Private Banking and Wealth Management. “We think that the bond market has sold off too much.”
Meanwhile, the ECB pledged to ramp up its buying of government debt in coming months in a bid to a contain rising bond yields that threaten to derail the region’s economic recovery. While policy makers are now committing to front load purchases, they still kept the overall size of the 1.85 trillion-euro ($2.2 trillion) pandemic bond-buying program unchanged.
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