Tech and Smaller Stocks are Leading as Wall Street Ticks Higher
On Wednesday, US stocks have risen in afternoon trading as investors wait for details regarding Washington’s next move for the economy.
Ahead of President Joe Biden’s speech that will likely discuss his plan on spending $2 trillion on infrastructure, the S&P 500 went up by 0.8%. If this gain holds, it will serve as the first for the index since last week’s record high.
On the other hand, as of 12:25 p.m. ET, the Dow Jones International Average had a 23-point or 0.1% increase to 33,090. Meanwhile, the Nasdaq composite rose by 1.9%.
Tech stocks and companies, which many expect to see significant growth in the future, helped in leading the way for the Market. Apple saw a rise of 2.9%, while Tesla saw a 3.8% increase.
Meanwhile, the 10-year Treasury yield steadily remained at 1.72%, but it stayed close to its highest rate prior to the pandemic.
Market Stocks and Biden's Infrastructure Plan
Biden is scheduled to deliver a speech in Pittsburgh on Wednesday. In it, he is expected to share details regarding his plans on spending federal dollars on infrastructure, including rebuilding roads and the electric grid. These programs may entail a flood of revenue in multiple industries, including raw material production and electric-vehicle production.
As for how the government will pay for it, higher corporate tax rates for businesses may be enforced, which may stifle the businesses’ profits. A number of investors have also expressed their worries about the spending and borrowing rate of the US government. They worry that this may entail higher interest rates for the economy.
The movement in the market could prove to be volatile for the entire day as investors close their books for 2021’s Q1. The S&P 500 remains on track for a near-6% increase for Q1, its fourth consecutive quarter of gains that came after a sharp plunge in early 2020.
Within this index, however, the performance looks to be the opposite of what was seen earlier in the pandemic. Now leading in performance are the energy producers, the financial businesses and the industrial companies. All of them have climbed between 10% and 30% for Q1 of 2021.
Meanwhile, those who led in performance during the pandemic, however, seem to have lagged behind. Apple dropped by 7% for the quarter, but on the other hand, American Airlines went up by more than 50%.
As for international stock markets, the German DAX saw no change, the French CAC 40 dropped by 0.3%, and London’s FTSE 100 fell by 0.9%.
Additionally, in Asia, Nikkei 225 in Japan dropped by 0.9% and South Korea’s Kospi fell by 0.3%. Hang Seng in Hong Kong fell by 0.7% while Shanghai’s stocks dipped by 0.4%.