Stocks generally rose on Wall Street on Monday as traders welcomed a lower move in long-term interest rates in the bond market. Investors are also looking at Washington, DC, while a major economic stimulus bill moves to the Senate.
The S&P 500 added about 2.4% on Monday. More than 95% of the shares in the index were higher on Monday, led by energy and technology companies. The Dow Jones Industrial Average rose just over 600 points, or nearly 2%, to 31,535, and the technically heavy Nasdaq Composition rose 3%.
Most of the focus on Wall Street was on the bond market, with yields on the 10-year treasury note up to 1.45% after rising to 1.5% last week, the highest level in more than a year. Higher interest rates could slow the economy and discourage lending.
Bond yields, affecting the interest rate on mortgages and many other types of loans, have risen sharply since 2021, as investors bet that vaccination efforts and more stimulus by the government will lead to strong economic growth later this year. However, with strong economic growth comes concerns about inflation.
A handful of high-level officials at the Federal Reserve will deliver speeches this week that are expected to give investors additional information on how concerned the country’s central banker is about the economy and the threat of inflation. Lael Brainard, a proponent of weakened monetary policy to boost growth at work, will give a monetary policy speech on Tuesday, and Fed Chairman Jerome Powell will deliver a speech on Thursday.
The House of Representatives has approved Biden’s $ 1.9 billion pandemic relief bill and it is now going to the Senate for approval. The bill gives cash in the struggling economy to individuals, businesses, schools, states and cities affected by COVID-19.
The stimulus bill is expected to include another round of $ 1400 one-time payments to most Americans, including an extension of other repayable tax credits, such as the child tax credit, and additional assistance to state and local governments to combat the pandemic.
According to Goldman Sachs analysts in a March 1 research note, the combination of the explosion of vaccines, stimulus payments and increased consumer savings due to the fiscal stimulus could drive economic recovery.
Johnson & Johnson’s share price rose 1.5% after the US Food and Drug Administration approved its own coronavirus vaccine, one that does not require extensive cooling like those made by Moderna and Pfizer.
Energy companies made some of the biggest gains on Monday. Exxon Mobil was up 3.7% and Occidental Petroleum was up 3.9%. Operating companies, including airlines defeated by the coronavirus pandemic, have also boosted the broader market. United Airlines rose 1.2%.
Investors will receive several major economic reports this week, including the February Friday job report. On Monday, a report on manufacturing came in better than expected, and new orders also came in better than expected.