The Wall Street rally continued on Tuesday, with the Dow Jones Industrial Average soaring more than 500 points and closing above 37,000 for the first time.
The surge in stock prices was bolstered by strong manufacturing data and news that the Biden Administration was planning to support a larger economic stimulus package. The Dow ended the day at 37,027.60, more than 500 points higher than on Monday, and a gain of 1.2% for the day.
The other two major indexes also rose sharply, with the S&P 500 climbing 0.9% to 4,082.93, and the Nasdaq Composite advancing 1.2% to 12,731.10.
The manufacturing sector was at the forefront of Tuesday’s rally, with the Institute for Supply Management’s purchasing manager’s index jumping to a five-month high. This suggests that the US economy is continuing to recover from the Covid-19 pandemic. Additionally, the news that President Biden is planning to support a larger economic stimulus package than previously expected added to the upside in the markets.
The Dow’s record close was also helped by a surge in tech stocks. Apple, a major component of the index, was up 3.2% on the day, while Microsoft and Amazon both surged more than 2%. The tech-heavy Nasdaq outperformed the other two major indexes, driven by a 4.7% rally in Tesla shares.
The S&P 500 and Nasdaq were also positively impacted by the news that the Biden Administration is planning to introduce a new infrastructure plan. According to reports, the proposal could amount to a $2 trillion investment in US infrastructure, with a focus on creating new jobs and rebuilding the country’s aging infrastructure.
Overall, Tuesday’s rally in the Dow confirmed that the market is still in a risk-on mood, despite lingering uncertainty about the economic recovery. With strong economic data and the news of the fiscal stimulus package, the markets are likely to remain bullish going forward.