The Dow closed at a record high Wednesday, as investors continued to back value stocks on optimism that the $1.9 trillion fiscal package will spur a stronger reopening and economic recovery.
The Dow Jones Industrial Average rose 1.46%, or 464 points, to close at record of 32,297.02, and the S&P 500 rose 0.61% and theNasdaq Composite closed flat, giving up its intraday gains.
President Joe Biden's $1.9 trillion stimulus package was passed the final vote in the House on Wednesday, and will now be sent to the White House to be signed into law.
"President Biden’s proposed $1.9 trillion fiscal package appears to be on track for approval by March 14, with much of the spending scheduled for this year and targeted toward consumers," Wells Fargo (NYSE:WFC) said. "We believe disbursements will supercharge an economic recovery already supported by an accelerated reopening and solid consumer finances — putting growth on track for its strongest rate in over 35 years," it added.
A sea of green washed over cyclical corners of the market, such as financials and energy, which tend to move in tandem with the economy.
Energy stocks were also boosted by rising oil prices as investors shrugged off a jump in weekly U.S. crude stockpiles for the second-straight week.
Crude inventories rose 13.8 million barrels last week, compared with economists' forecasts for a build of 816,000 barrels. The large build was attributed to a fall in crude inputs needed to make fuel products like gasoline as refineries in Texas make a slow return to operations following weather-related disruptions.
The faster pace of growth is expected to trigger an uptick in inflation, but many including the Federal Reserve have suggested any spike in price pressures will likely be transitory.
The Labor Department said on Wednesday its Consumer Price index rose 0.4% last month, in-line with economists' estimates. The latest data eased investor fears that inflation is set to spiral out of control and push U.S. rates up at a disorderly pace, muddying demand for the long-duration growth stocks that have longer paybacks.
"Despite inventory shortages, commodity price pressures and supply bottlenecks, inflation continues to be very tame," Jefferies (NYSE:JEF) said in a note.
Tech stocks ended lower, struggling to hold onto intraday gains following a 4% rally a day earlier, as semiconductor stocks slipped on a report pointing to signs of softer Apple iPhone demand.
Apple (NASDAQ:AAPL) reportedly plans to cut iPhone production by 20% during the first half of the year, Niukkei Asian Review reported, citing sources. Most of the cut in production was targeted at the iPhone 12 Mini.
Teradyne (NASDAQ:TER), Micron Technology (NASDAQ:MU) and Lam Research (NASDAQ:LRCX), each down more than 4%, were among the biggest decliners in semis.
In other news, Roblox (NYSE:RBLX) made its public market debut at $64.50 a share, well above its reference price of $45. The shares were last trading at $69, up 54%.
GameStop (NYSE:GME), meanwhile, was involved in yo-yo action, swinging to a more than 40% loss before recovering losses to end the day up about 7%.