The Dow Jones Industrial Average breached the 30,000-mark for the first time on Tuesday, as optimism that Covid-19 vaccines will open the way to economic recovery next year fueled Wall Street’s rebound from a pandemic-driven crash this year.
Global stock markets sank in February and March as the novel coronavirus spread across Europe and the United States, abruptly halting a bull run that dates back to the aftermath of the 2008 financial crisis.
While US economic activity is reeling from the damage inflicted by lockdowns and employment is at levels last seen in 2015, a raft of monetary and fiscal stimulus has powered Wall Street’s main indices back to record highs.
Technology-heavy Nasdaq is trading just around 12,000 points after crossing 10,000 for the first time in June, while the S&P 500 has soared 65% since crashing to a more than three-year low in March.
For the blue-chip Dow, the journey to 30,000 from the 20,000 mark took less than four years, a much faster climb than the previous 10,000-point clamber, which took nearly two decades. The rise from 29,000 to 30,000 took the Dow about 10 months.
All the 11 major S&P indices were up, with economically-sensitive sectors such as banks, industrials and energy leading gains as investors rotated out of technology heavyweights that were seen as safe bets during the recession.
The Dow was lifted by a 4.9% rise in Boeing after European regulators gave draft approval to its 737 MAX jets, paving the way for a formal flight clearance in January.
“Today, the market is going to largely focus on the new administration’s steps going forward,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in New York.
After weeks of legal challenges by the Trump campaign to overturn the election result, the US federal agency that must sign off on the presidential transition told Biden on Monday that he can formally begin the handover process.
Sentiment was also boosted on reports that Biden planned to nominate former Federal Reserve chair Janet Yellen as Treasury Secretary, which could shift the focus heavily towards efforts to tackle growing economic inequality.
Recent data suggesting a Covid-19 vaccine could be available before the end of the year has put the benchmark S&P 500 on course for its best November since 1980 and brought the Dow close to breaching 30,000 points for the first time.