Wall Street Touches a Record as First Quarter Ends with a Bang

01 Apr 2021 · 3rd Party Analysis

WRITTEN BY ThorFX

In Summary

  • S&P500 touches a record on Wednesday, futures on Thursday remain to the upside
  • The quarter closes strongly positive, underpinned by vaccine progress, stimulus and high hopes

Equities rallied to a new high on Wednesday as President Joe Biden announced his new multitrillion-dollar US stimulus plan aimed to provide another boost to the economy as it remains on its way to the strongest recovery since the 1980s. 

The S&P500 briefly touched an all-time high during the session but later eased off and closed 0.36% to the upside, or 14.34, to finish the day and the first quarter at 3,979.89. The Dow Jones Industrial Average closed the session in negative territory, down 0.26%, or 85.41 points, to end at 32,981.55. Technology stocks powered a rally in the Nasdaq Composite which ended the session higher by 1.54%, or 201.48 points, ending at 13,246.87. 

Investors cheered the proposed new measures that promise to take the US further ahead towards economic growth and prosperity. “It’s bold, yes, and we can get it done”, said President Biden as he rolled out the $2tn infrastructure plan. “It’s a once-in-a-generation investment in America,” he said in his speech on Wednesday. 

The major initiative, called the American Jobs Plan, aims to release the spending over the course of eight years and this would be only the first portion of a two-part economic plan. The second part would be centered on child care, education and healthcare and will be worth between $1tn and $2tn. 

The announcement boosted the tech sector which lifted the S&P500 and the Nasdaq Composite, while the Dow Jones slipped into the red. For the quarter, however, the 30-stock blue-chip index finished higher by 7.8%, the biggest winner of the three benchmark indexes. The S&P500 closed the first quarter up 5.8%, while the tech-focused Nasdaq Composite added 2.8%. Tech jitters weighed on the Nasdaq throughout the quarter as investors tried to make sense of rising interest rates and increasing fears of inflation. Before Wednesday, the technology index was up only 1.2% and it ended up gaining more on the last day of the quarter than it had for the whole trimester.

2021 Starts in a Positive Note After Abismal 2020

The new year kicked into gear swiftly as progress over the vaccination program elevated hopes for a quick economic bounceback. In addition, President Biden approved the financial aid of $1.9tn in stimulus and funding is expected to start creating new jobs as soon as this month.

The quarter will go down as one full of heavy risk-taking across all asset classes with some individual assets surging to stratospheric levels. Meme stocks such as GameStop skyrocketed, cryptocurrency assets like Bitcoin were among the hottest picks in the market, and, overall, investors embraced a fearless, risk-hungry approach to the broad market, swishing money around to prompt a buy-everything rally.

As the market heads into the first day of trading in the second quarter of 2021, stocks sit near record highs, bitcoin hovers around the $60,000 mark, about 4% from its all-time high and by the looks of it, the Nasdaq is preparing to open the session higher by 1.00%, while S&P futures and Dow Jones futures indicate a green open by roughly 0.30% and 0.10%, respectively.

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