US stocks finished on record highs as trading closed on Wednesday, as Joe Biden was sworn in as 46th President of the United States. The reasons behind the rising prices in shares attributed to the arrival of the new administration are centered around expected support for economic recovery – most notably the $2,000 stimulus checks for all Americans.
After largely writing off the Capitol storming earlier this month as mere blip unlikely to affect the economy in the long term, most major stock indices on Wall Street have sharply surged in value. A price surge was expected, with many predicting that Biden being sworn in would inspire investor confidence, however few expect the record highs that we saw on Wednesday.
The S&P 500 saw the sharpest rise, as it shot up 1.4%, to close at 3,851.85 – surpassing the record closing level it had only set earlier this month. Elsewhere, the Dow Jones Industrial Average saw a 0.8% rise, while the Nasdaq Composite took a 2% leap.
The economy is still plagued by high unemployment levels and multiple business closures as a result of the Covid-19 pandemic that has left economies reeling across the globe. However the tag team of mass vaccination roll out and the first round of expected economic stimulus under the Biden administration has galvanized enthusiasm among investors and large swathes of the American public, resulting in stock rises.
The Biden Administration has also outlined plans to get the Covid-19 pandemic under control, which will initially result in restrictions and the mandatory use of masks in indoor public places, such as supermarkets and shopping malls. The Trump Administration was viewed by many to have grossly mishandled the pandemic, with the US becoming one of the worst affected nations per capita as a result.
It will undoubtedly take time to wrestle the virus under control, so the projected economic growth in the US is not on the near horizon. “It will get worse before it gets better” or words to that effect have been uttered by government officials and health experts across the globe, and they will ring true going forward in the United States as well. Getting the virus under control is just the first step of a long journey to economic recovery, however, the record highs hit by US stocks on Wednesday prove that there is substantial market confidence that the Biden administration will lead the US economy to the light at the end of the tunnel.