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Wall Street hits records on economic optimism; dollar falls

Stock MarketsAug 25, 2021 06:01PM ET
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2/2 © Reuters. FILE PHOTO: A man wearing a facial mask in Tokyo, Japan, January 4, 2021. REUTERS/Kim Kyung-Hoon 2/2

By Chibuike Oguh

NEW YORK (Reuters) -Wall Street stocks rose while the U.S. dollar slipped on Wednesday, with investors more optimistic a day after the House of Representatives passed the $3.5 trillion budget framework and a top health official expressed confidence in fighting COVID-19.

On Tuesday, the Democratic-controlled House voted to advance the framework, key to President Joe Biden's agenda. Investor confidence in the economic outlook also got a boost when Dr. Anthony Fauci, top U.S. infectious disease expert, said COVID-19 could be under control by early next year.

The benchmark S&P 500 and the Nasdaq closed at all-time record highs, while the Dow made gains led by financials, industrials, communications and the consumer discretionary sector. It was the S&P 500's 51st record high close this year.

Investors remained focused on what U.S. Federal Reserve Chair Jerome Powell might say on Friday about tapering the central bank's bond-buying program when he speaks at the Jackson Hole symposium.

The dollar index, which measures the U.S. currency against a basket of six major currencies, fell 0.087% to 92.832.

"Part of the risk-on move that began on Monday with FDA approval of vaccines has continued," said Michael Ashley Schulman, chief investment officer at Running Point Capital.

"Some investors feel we're reaching the peak of the COVID wave, thus reopening and economic growth will continue."

The MSCI world equity index, which tracks shares in 50 countries, rose 0.16%, while the pan-European STOXX 600 index rose 0.01%. Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan rallied 2.41%.

U.S. Treasury yields rose to the highest in almost two weeks ahead of Powell's speech. Algorithmic traders also sold Treasuries after the 10-year yields broke above their 200-day moving average.

Benchmark 10-year yields gained six basis points to 1.347%.

On Wall Street, the Dow Jones Industrial Average rose 0.11% to 35,405.5, the S&P 500 gained 0.22% to 4,496.19 and the Nasdaq Composite added 0.15% to 15,041.86.

"Bond yields are rising and the reopening trade is on full blast, banks and other cyclicals are doing well. Tech is taking a back seat," said Thomas Hayes, managing member at Great Hill Capital.

Oil prices rose more than 1% for a third session of gains, after U.S. data showed fuel demand climbed to its highest since the start of the pandemic.

Brent crude rose 1.7% to settle at $72.25 a barrel. U.S. West Texas Intermediate (WTI) crude rose 1.2% to settle at $68.36 a barrel.

Gold slid over 1%, retreating further below the $1,800 level as investors awaited the Jackson Hole symposium.

Spot gold slipped 0.7% to $1,790.83 per ounce. Bullion had rallied 1.4% on Monday to the highest in nearly three weeks, driven by a broad retreat in the dollar.

Wall Street hits records on economic optimism; dollar falls
 

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Comments (9)
Kelly Mayer
Kelly Mayer Aug 25, 2021 8:34PM ET
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Look at the Covid graphics worldwide. We're exacly going through the same as last year, only with much bigger case and mortality numbers, despite the vaccines. Record infections are coming this winter, when the argument will to shift to the antivirals needed in conjunction with the vaccine (Pfizer is on phase 2 trials for these). Prepare for a March 2020 market dip this coming winter. Just look at the numbers, it's all there for everyone to see. Of course this is all fake data, as c19early.com is the real cure for covid. But this was never about Covid. Climate change catastrophe fear propaganda coming in 2022, to take the Covid-money-making-machine's place.
Darryl Allen
Darryl Allen Aug 25, 2021 8:34PM ET
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The numbers show nearly 0 deaths from covid since March
Baba Jaga
Baba Jaga Aug 25, 2021 7:21PM ET
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Well🤔 lets see this.. So dollar is bearish ha?? So what is this.. ? https://www.tradingview.com/x/0G1RLMmz/ Or this if u missed the boat?? Any comments?? Investing?? https://www.tradingview.com/x/ZYkAT2HC/
Dave Jones
Dave Jones Aug 25, 2021 5:27PM ET
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Dear America. Yeah...umm biden...is he ok? The old boy seems kinda lost?
vincent li
vincent li Aug 25, 2021 8:59AM ET
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You guys work for the institution.. Get a life
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 25, 2021 4:25AM ET
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Monkey rides stimulus lion and gets eaten alive soon after
Millennial Metals
Millennial Metals Aug 25, 2021 1:08AM ET
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The USA is an embarassment. China will soon take over.
jason xx
jason xx Aug 25, 2021 1:08AM ET
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Actually your posts are an embarrassment
Jamie Morin
Jamie Morin Aug 25, 2021 12:29AM ET
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slowing economy and rising inflation. never good to mix .....we'll see how things play out by December, I don't think powell is forthcoming about this transitory inflation and I'm seeing stagnant growth estimates out of Bank of America. probably why they have a neg outlook for year end sp500 at 4200
Matt Brackley
Matt Brackley Aug 25, 2021 12:13AM ET
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Pretty sure JPow is just a shepherd. Eventually he will take out the shears though. Hope you have enough insulation because winter may be colder than most years.
Joel Schwartz
Joel Schwartz Aug 24, 2021 11:39PM ET
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Powell is a fraud. His job is to lie to the public about inflation.
Richal Morlp
Richal Morlp Aug 24, 2021 11:39PM ET
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Hola
Rob Fordham
Rob Fordham Aug 24, 2021 11:39PM ET
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Time will tell. So far he is looking spot on
 
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