The Dow closed in record territory on Wednesday, despite the storming of the U.S. Capitol by hundreds of supporters of President Trump, disrupting a joint session of Congress called to certify Joe Biden’s victory over Trump.
Meanwhile, the Democratic Party won both U.S. Senate seats in the second round of elections in Georgia, according to the Associated Press, raising the odds that President-elect Biden could push his agenda forward.
How did the stock market indices perform?
The Dow Jones Industrial Average DJIA
closed 437.80 points, or 1.4%, higher to end at a record 30,829.40, after hitting an intraday high of 31,022.65.
The S&P 500 SPX Index
gained 21.28 points, 0.6%, to close at 3,748.14.
The Nasdaq COMP Composite Index
turned around to close down 78.17 points, or 0.6%, at 12,740.79.
The Russell 2000 RUT Small Cap
gained 4% to finish at a record 2,057.92.
On Tuesday, stocks ended higher:
The Dow Jones rose 167.71 points, or 0.6%, to 30,391.60
The S&P 500 added 26.21 points, or 0.7%, to 3,726.86
The Nasdaq Composite Index gained 120.51 points, or 1%, to trade at 12,818.96.
The Russell 2000 RUT Index
increased by 1.8%.
What drove the market?
Politics and the outbreak of civil discord in Washington dictated Wednesday’s trade action as Trump supporters broke through the Capitol compound and clashed with police, disrupting a newly-started joint session of Congress the process of certifying, state by state, the results of the November conference. 3 presidential election following a controversial election, with the flames fanned within two months of polling day by allegations of fraudulent conduct that met with no success in dozens of state courts and federal.
Watch: Hundreds of Trump supporters storm Capitol Hill, smash fences, fight with police
Lily: McConnell defends election results as GOP splits from Congress confirming Biden victory
After hours of progressively aggressive protest activity, Trump supporters pushed Washington police to order the evacuation of the Capitol building and the deployment of National Guard and Department of Homeland Security agents.
“I don’t think the protests are a surprise,” Randy Frederick, vice president of trading and derivatives for Charles Schwab, told MarketWatch. “What I think might come as a surprise is that the security to prevent people from entering the Capitol building was weaker than people expected. It’s probably a surprise to everyone. ”
The unrest followed the second round of elections for the U.S. Senate seats in Georgia which rocked parts of the market, causing a rotation of oppressed stocks hit hard by an economic crisis triggered by the pandemic.
Democrat Raphael Warnock beat incumbent Republican Kelly Loeffler for a seat in the U.S. Senate, and a reduced victory was called Wednesday night for Democrat Jon Ossoff over Republican Senator David Perdue in the other race, according to the Associated Press. A Democratic sweep in Georgia gives the party effective control of the Senate, with the seat count split 50-50, including the two independents meeting with the Democrats, as Vice President-elect Kamala Harris would vote to break the Senate. equality as president of the chamber.
With Democrats now poised to control both houses of Congress, the odds are seen by the markets as an improvement for Biden to successfully implement his legislative agenda.
“The key is the possible change in the political power landscape in Washington, DC and what that will mean for spending,” Jeanette Garretty, chief economist at Robertson Stephens Wealth Management, told MarketWatch.
“Investors say the most immediately that it will mean more money spent to support individuals and a greater likelihood of an infrastructure deal,” she said. “But buried in all of this, it’s probably also a hypothesis that it will be easier to send money to states for more effective vaccine deployment.”
XLK technology stocks
fell, lagging behind value-driven stocks on expectations that a Democrat-controlled Congress could lead to higher taxes and tighter regulation of internet-based businesses.
U.S. bond yields soared as fixed-income investors bet a “blue wave” in Washington would increase government spending to combat the impact of COVID-19 on the economy.
Meanwhile, economic data released Wednesday morning gave a darker view of the U.S. economy than analysts expected. The automatic data processing report on private sector employment showed the first decline in jobs since April. Private sector jobs fell by 123,000, ahead of Friday’s employment report further followed by the Labor Department.
The U.S. IHS Market Services Purchasing Managers Index for December fell to 54.8 in December from 58.4 in November, signaling slower expansion amid a surge in cases of coronavirus. However, factory orders increased for a seventh month.
On the coronavirus front, the United States counted at least 238,763 new cases on Tuesday and at least 3,648 people have died, according to a New York Times tracker. Over the past week, the United States has recorded an average of 219,650 cases per day.
The minutes of the Federal Reserve’s last meeting in December which were released on Wednesday showed that the rate-setting committee had decided not to extend the maturity of its Treasury holdings.
See also: Here’s what a ‘blue wave’ forming in Washington means for the markets
Which companies were targeted?
Actions of JPMorgan Chase & Co.
finished up 4.7%, with investors betting on a steeper yield curve. Actions of Bank of America Corp
shares climbed 6.5% after a European regulator approved its COVID-19 vaccine.
Tech giants have lost ground: Amazon.com Inc.
stocks fell 2.5%, Facebook Inc.
stocks lost 2.8% and Alphabet Inc.
stocks fell 0.3%.
Clean energy companies like SolarEdge Technologies Inc.
and TPI Composites Inc.,
which makes parts of wind power, also increased.
Shares were 2.8% higher, closing at $ 755.98, as Wall Street analysts remained divided on whether the company’s price target should be closer to $ 800 or $ 200 .
Lily: Here’s what a ‘blue wave’ forming in Washington means for the markets
What have other markets done?
The BX 10-year Treasury bill: TMUBMUSD10Y
jumped above 1% for the first time since March, up 8.6 basis points, as traders bet on higher inflation and more debt issuance, which would erode the value of bonds in circulation. Bond yields rise as prices fall.
Oil futures closed higher on Wednesday after Saudi Arabia surprised the market by cutting production. Gross for delivery in February CLG21
was up 1.4% to $ 50.63, its first close above $ 50 a barrel in 11 months.
GCG21 Gold Futures
settled 2.3% lower at $ 1,908.60 as bond yields rose.
Pan-European Stoxx 600 Europe XX: SXXP Index
finished 1.4% higher, while London’s FTSE 100 UK: UKX
jumped 3.5% after Moderna’s coronavirus vaccine got the green light from a European regulator.
In Asia, the Hang Seng index of Hong Kong HK: HSI
rose 0.2%, while Shanghai Composite CN: SHCOMP
gained 0.6% and Japanese Nikkei 225 JP: NIK
The ICE US dollar DXY index
a measure of the US dollar against a basket of six major rivals, was flat.
Read more: 10 Biden tax proposals that would go through a Democratic-controlled Senate – and how to prepare for them