The U.S. stock market had a big start to the new week as investors welcomed the nation back home. After a long weekend of trading, the Dow Jones Industrial Average (DJIA) and S&P 500 both saw gains of more than 1%. The Nasdaq Composite rose 0.6%.
The positive start is a sign that investors expect a strong economic recovery in the second half of the year, despite the ongoing COVID-19 pandemic. The DJIA saw its second-best performance since early June, while the S&P 500 notched its best start to a week in nearly three months.
Investors were also buoyed by the news that the U.S. economy grew by a record 33.1% in the third quarter. This was the biggest spike in economic growth since 1947. With the growth, the unemployment rate edged down to 6.9%.
The stock market is now looking for signs of a more broad-based recovery. The housing industry, for instance, saw an 11.1% gain in new home sales in September, the biggest increase in nearly 15 years. Consumer spending rose 2.7%, which was the highest it’s been since February.
However, the stock market was tempered by the lack of progress in stimulus negotiations between Democratic leaders and the White House. The two sides remained at odds over a stimulus package, which could impact the speed of the economic recovery.
Still, investors remain optimistic about the market. Jason Ware, chief investment officer at Albion Financial Group, said that the markets are looking ahead to a time when the pandemic is in the rearview mirror.
“The market wants to look ahead and focus on what the world looks like in 2021 and 2022, beyond the pandemic,” Ware said.
Overall, the stock market had a strong beginning to the week. Investors are optimistic about the economic recovery, but will be monitoring the situation to see what additional measures will be taken to unleash more stimulus. The jury is still out on where the stock market will be in the months ahead, but for now, it’s off to a good start.