The S&P 500 added to gains to climb to a fresh record Thursday led by surge in cyclical stocks after President Joe Biden announced nearly $600 billion deal on infrastructure, paving the way for fresh investment in roads, bridges and broadband internet.
The S&P 500 rose 0.60% to record intraday high of 4,267.71.20 and the Dow Jones Industrial Average jumped 0.94%, or 319 points, while the Nasdaq climbed 0.7% having hit an all-time high of 14,414.5 intraday.
“We have a deal,” Biden told reporters Thursday. “I think it’s really important we’ve all agreed that none of us got all that we wanted.”
The deal didn’t include the more ambitious initiatives including spending to expand child care and was much lower than the $2.3 trillion package touted by Biden earlier this year. The plan will have to move forward alongside a much larger package -- expected to be funded by tax hikes -- that would focus spending on “human infrastructure." But there is not much wiggle room to get the proposed larger infrastructure package passed in Congress where Democrats hold a slender majority.
The upgrade to critical infrastructure is widely expected to boost productivity and ultimately economic growth.
Cyclical areas of the market, which benefit from stronger economic growth, added to gains with financials leading to the upside.
Financials were also helped by jump in banking stocks ahead of the Federal Reserve's stress test results due later Thursday, that could pave the way for a massive wave of capital return to shareholders.
JPMorgan Chase & Co (NYSE:JPM), Goldman Sachs Inc (NYSE:GS) and Wells Fargo & Company (NYSE:WFC), with the latter up 3%.
Tech, meanwhile, was helped by a bid up in chip stocks even as some warn there isn't any light at the end of the tunnel just yet for the supply shortage in chips. Flex, the world’s third-biggest chipmaker, said the lack of supply is likely to last until at least mid-2022.
With the exception of Apple (NASDAQ:AAPL), and Amazon.com (NASDAQ:AMZN), megacap tech was mostly higher with Microsoft adding to its $2 trillion market cap.
Microsoft (NASDAQ:MSFT, Facebook (NASDAQ:FB), and Google-parent Alphabet (NASDAQ:GOOGL) were in the green.