Markets closed on Wednesday with mostly positive rebounds, and a record close for the Dow Jones Industrial Average (DJIA). Investors who had lost confidence due to recent swings may now see that there is indeed life left in the market, especially at the value end of the scale.
Is the correction period over? Here’s what happened on Wednesday and what it could mean moving forward.
Passing of Coronavirus Relief Bill is Key to Market Sentiment
The recent passing of a $1.9 trillion coronavirus relief package has spurred confidence in the stock market. With more federal funding for citizens and affected businesses, investors believe that the recovery and return to normal will be faster and stronger than anticipated.
The Dow Jones Industrial Average grew by 1.46% on Wednesday when compared to the previous close. It hit a new record of 32,297.02 points.
Other major indexes also performed well considering the disappointing numbers earlier this week. The NASDAQ Composite (COMP) staged a comeback from previous losses to close flat on Wednesday. The S&P 500 (SPX) closed with a 0.61% gain.
A lot of the movement is at the lower end of the market and in value stocks that have been hit hard by selloffs and corrections. Financial and energy stocks performed especially well. These stocks are generally tied to economic performance, so it’s somewhat unsurprising that they are popular today.
Rising oil prices also contributed to an increase in the stock market. Energy stocks are benefiting from higher oil prices as investors expect stronger revenue and earnings in the coming months. A recovery in the oil market suggests strong confidence for a wider global economic recovery driven by consumer spending.
How Will the Markets Perform at the Close of This Week?
Dow Jones, NASDAQ, and S&P futures were all up ahead of trading this Thursday morning. This suggests that confidence is still strong and that it could continue throughout this week. The passing of the stimulus bill in Congress will continue to be a boon for stocks. The $1.9 trillion spending package is one of the largest in history and should go a long way to ensure that America’s families and businesses recover from the Coronavirus Pandemic.
The recent corrections have created bargains in some of the most popular picks of 2021. Providing that no major hurdles appear in the coming days, bullish sentiment could return to mainstream stocks.
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