The U.S. stock market advanced last week as investors remain optimistic about the large U.S. stimulus package. The S&P 500 and Nasdaq posted their biggest weekly percentage gains since early February, while the Dow Jones Industrial Average had its biggest weekly gain since November.
U.S. President Joe Biden signed a $1.9 trillion COVID-19 relief package on Thursday, and the prospect of more government spending keeps the market in a positive mood. The pandemic is still the main drag for an economic comeback, but U.S. President Joe Biden called on all states to make all adult Americans eligible for COVID-19 vaccines by May 1.
U.S. Treasury yields rose to fresh one-year highs on Friday, which raised some worries that the upside potential for Wall Street’s three main indexes remains limited for now. Higher yields pose a risk to the economic recovery amid rising borrowing costs, but the U.S. central bank is widely anticipated to maintain rates and stimulus programs unchanged.
“We are back to the idea that more growth is more inflation, and investors are a little nervous about current yield levels, which is affecting tech stocks. It’s all about the pace in which yields grow, and the market seems to be comfortable with another 10-20 basis points jump in the benchmark yield if backed up by strong data that shows the economic recovery,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments in Houston.
The positive news is that initial jobless claims for the week ended March 5 improved to 712K; still, the labor market is far from full employment.
S&P 500 up 2.6% on a weekly basis
For the week, S&P 500 (SPX) booked a 2.6% increase and closed at 3,943 points.
