The Dow Jones Industrial Average topped 30,000 for the first time and investors piled into risk assets as a series of market-friendly developments unleashed animal spirits on Wall Street.
The S&P 500 hit a record, spurred by the formal start of President-elect Joe Biden’s transition, news that all but removed the threat of a contested transfer of power.
Investors also woke up with a clear sense of what Biden’s Treasury Department will have in policy preferences after he nominated Janet Yellen to the post. A third promising vaccine candidate added to the euphoria, boosting bets that the economy can soar next year.
The rotation into risk assets was widespread. Small caps in the Russell 2000 added another 1.8%, pushing its November rally past 20%. Tesla Inc. tacked on another 5% and is now worth $500 billion. Carnival Corp. jumped 10%, Planet Fitness Inc. rose 9% and MGM Resorts International added 7%.
Four stocks rose for every one that fell in the S&P 500, while only three Dow companies dropped. Bitcoin rose to a three-year high, topping $19,000 as it closed in on a record.
“Everybody’s just ecstatic with the vaccine news,” said Jerry Braakman, chief investment officer of First American Trust, in Santa Ana, California, which manages around $2 billion.
“We had to slug through the election results, there’s a sense of relief that we didn’t decay into anarchy. That was definitely holding back the economy. We know how well stock markets do with recovery and its vision ahead. That’s normally the best time for markets,” Backman explained.