Financial Markets Wall Street

FILE - In this Oct. 14, 2020 file photo, pedestrians pass the New York Stock Exchange in New York. Stocks are getting back to rallying on Wall Street after Congress, in a late-night session, certified Democrat Joe Biden's Electoral College victory. The S&P 500 rose 0.8% in the early going Thursday, Jan. 7, 2021 on its way to another record high. (AP Photo/Frank Franklin II, File)

Major US stock indexes surged to all-time highs Thursday as Wall Street bet that the Democratic sweep of Washington means more stimulus is on the way for the economy.

The S&P 500 rose 1.5% to a record 3,803. Investors were buoyed by Congress’ confirmation of Joe Biden’s presidential election win and a shift in control of the Senate to the Democrats and largely moved on from the previous day’s violence and chaos at the Capitol building.

With Democrats fully in control of Washington, Wall Street is anticipating the Biden administration and Congress will try to deliver $2,000 checks to most Americans, increase spending on infrastructure and take other measures to nurse the economy amid the worsening pandemic.

“The expectations are shifting to more stimulus, sooner, which is generally better for the economy and better for the market as well,” said Rob Haworth, senior investment strategy director at US Bank Wealth Management.

The rally was broad-based, though the S&P 500′s technology sector notched the biggest gain, recouping losses after a pullback a day earlier. Treasury yields continued to rise, reflecting expectations that higher government spending will drive up inflation.

The Dow Jones Industrial Average, Nasdaq composite and Russell 2000 index of smaller companies also notched new highs. The Dow gained 211.73 points, or 0.7%, to 31,041.13. The tech-heavy Nasdaq climbed 326.69 points, or 2.6%, to 13,067.48. The Russell 2000 picked up 38.96 points, or 1.9%, to 2,096.89. The S&P 500 rose 55.65 points to 3,803.79.

Wall Street’s latest rally adds to gains from a day before, when stocks rose on the results of two Senate runoff elections in Georgia that went to the Democrats. But the market did pull back somewhat Wednesday after loyalists to President Donald Trump stormed the Capitol as lawmakers were certifying his loss to Biden.

Investors are largely looking past the current political ugliness — and the pandemic’s acceleration around the world — and are focusing instead on prospects for an improving economy. Beyond hopes for increased stimulus from Washington, much of Wall Street expects the rollout of COVID-19 vaccines to help daily life around the world get closer to normal. That has investors anticipating a explosive return to growth for corporate profits later this year.

The market “is really looking through to year-end at what looks like a really solid year for earnings growth,” Haworth said.

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