Dow closes above 30,000 for the first time ever on Biden-transition rally
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- US equities jumped on Tuesday after the General Services Administration’s ascertainment of President-elect Joe Biden’s victory lifted investor sentiments.
- The Dow Jones industrial average climbed above 30,000 for the first time, marking a rapid comeback after the index sank as low as 18,213 in March.
- The GSA announced Monday afternoon that it would provide the “resources and services” needed to start Biden’s transition to the White House. It’s the clearest sign yet that the Trump campaign accepted its loss in the 2020 race.
- Bitcoin surged above $19,000 for the first time since 2017 and closed in on its all-time high of roughly $19,700.
- Oil futures erased most of their pandemic-induced losses and hit their highest levels since March. West Texas Intermediate crude jumped as much as 5%, to $45.20 per barrel.
- Watch major indexes update live here.
US stocks jumped on Tuesday as the start of the transition to a Biden administration spurred another rotation to cyclical stocks.
The Dow Jones industrial average rose above 30,000 for the first time ever. Boeing led the benchmark index higher, followed by Chevron and JPMorgan. The new record caps a breakneck rebound from the start of the pandemic, when overwhelming bearishness dragged the index as low as 18,213 in March.
Here’s where US indexes stood at the 4 p.m. ET close on Tuesday:
- S&P 500: 3,635.41, up 1.6%
- Dow Jones industrial average: 30,046.24, up 1.5% (455 points)
- Nasdaq composite: 12,036.79, up 1.3%
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The General Services Administration’s administrator said Monday the agency will provide the “resources and services” necessary to begin President-elect Joe Biden’s transition to the White House. The ascertainment came more than two weeks after major news outlets called the election for Biden.
The typically controversy-free process has been delayed largely by President Donald Trump’s legal challenges to the election’s outcome. The move is the closest the Trump campaign has come to conceding defeat, and it diminishes political uncertainties lingering from Election Day. Still, Trump indicated in a tweet on Monday that his legal fights would continue.
Value and cyclical stocks outperformed as investors boosted bets on sectors hit hardest by the coronavirus pandemic. Tech giants lagged behind the upswing and led the Nasdaq composite to modestly underperform.
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Tuesday’s gains followed a similarly fruitful session to start the week. Stocks gained on Monday following reports that Biden would pick former Federal Reserve Chair Janet Yellen as his treasury secretary. If confirmed, Yellen will be the first woman to hold the position.
Earlier in the day, a positive update from trials of AstraZeneca’s coronavirus vaccine bolstered investor sentiments. Vaccine progress has boosted the so-called reopening trade as investors bet on airlines, hotels, and retailers to fully recover in the new year.
“The market is setting up for what could be a perfect storm for value and cyclical, supporting a continuation of the outperformance for these groups since the vaccine news started flowing three Mondays ago,” Lindsey Bell, chief investment strategist for Ally Invest, said.
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On the economic data front, US home prices gained a record 3.1% through the third quarter amid historically low mortgage rates and robust demand, the Federal Housing Finance Agency said Tuesday. Prices jumped 7.8% from the year-ago period.
The housing market has served as a unique bright spot in the virus-slammed economy, and other indicators including homebuilder sentiment and housing starts suggest prices will continue to climb into 2021.
Tesla surged as much as 7.3%, bringing its market capitalization above $500 billion for the first time ever. The automaker’s latest rally cemented CEO Elon Musk as the world’s second-richest person after he overtook Microsoft co-founder Bill Gates on Monday.
Adding to the achievement-laden trading day, bitcoin ripped above $19,000 for the first time since 2017. The jump places the token just below its all-time high of roughly $19,700. The world’s most popular cryptocurrency has rallied as Wall Street and Main Street expressed new interest in digital tokens and their use cases. The rally also lifted peer cryptocurrencies including Ethereum and Ripple.
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The shift away from safe-haven and hedging assets dragged gold prices to their lowest since July. The precious metal fell as much as 2%, to $1,800.47 per ounce, at intraday lows.
The US dollar weakened against a basket of group-of-10 peers as Yellen’s appointment spurred hopes for fiscal stimulus. Treasury yields wavered.
Oil futures hit their highest levels since March on lasting vaccine optimism. West Texas Intermediate crude jumped as much as 5%, to $45.20 per barrel. Brent crude, oil’s international benchmark, gained 4.3%, to $48.03 per barrel, at intraday highs.
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