On Wednesday, February 3, 2021, the Dow Jones Industrial Average (DJIA) surged more than 500 points to close at a record high, ending above 37,000 for the first time. The surge was led by optimism over the incoming Biden administration’s plans for another financial stimulus package, improved corporate earnings reports, and a strengthening global economic outlook.
The Dow ended the day up 535 points, or 1.5%, at 37,090. The S&P 500 index gained 1.1%, while the tech-heavy Nasdaq Composite index added 0.6%.
Analysts attributed the market’s strong performance to expectations of continuous monetary stimulus from both the Federal Reserve and the incoming Biden administration, as well as higher profits from big companies. Wall Street is also expecting news soon regarding President Biden’s $1.9 trillion Covid relief package, which is expected to include additional stimulus payments for individuals and additional Paycheck Protection Program loans for businesses.
The positive sentiment also comes amid an improved global economic outlook, with early signs of recovery, particularly in Asia, Europe, and the US. In addition, US manufacturing activity also expanded in January, hitting a two-and-a-half year high.
To close the Dow’s record-breaking day, Goldman Sachs rose 4.1%, Microsoft Corp gained 2.7% and Boeing Co added 2.9%. Meanwhile, the technology sector enjoyed a positive session, with Apple Inc up 2.5%, and Amazon.com Inc up 1.4%.
It remains to be seen whether or not this record-breaking run can be sustained, but for now, Wall Street is expressing optimism over the economic prospects of 2021.
