Following Trump’s newly signed orders, Dow climbed over 350 points while S&P 500 nears an all-time high with its recent gain.
On Monday, the Dow Jones (INDEXDJX: .DJI) and S&P 500 (INDEXSP: .INX) jumped, each with a significant gain. The Dow gained 1.3%, an increase of 357.96 points to 27,791.44. Regarded as a pacesetter, Caterpillar Inc. (NYSE: CAT), was among the best-performing stocks in the Dow, as it jumped over 5%. In addition, Boeing Company (NYSE: BA) and Dow Inc. (NYSE: DOW) equally added more than 5% each. JPMorgan Chase & Co. (NYSE: JPM), the leading global financial services firm, gained more than 1%.
DOW and S&P 500 Indexes Added Gain
The gain seen by both the Dow and S&P 500 suggests that investors are becoming more confident in the individual stocks they hold. For the S&P 500, the Monday surge marked the seventh straight day of increase. With this, the S&P 500 is moving closer to an all-time high.
Referring to the increases, Adam Crisafulli, the founder and president of Vital Knowledge said:
“This actually suggests investors are turning more sanguine on the broader macro landscape, encouraged by the solid CQ2 earnings season and the bullish July economic data last week”.
However, the Nasdaq composite suffered a hit as traders slowed down on Big Tech stocks. Also, on Monday, Facebook Inc (NASDAQ: FB) and Netflix Inc (NASDAQ: NFLX) dropped 2% each, while Microsoft Corporation (NASDAQ: MSFT) also fell almost 2%. In addition, Amazon.com Inc (NASDAQ: AMZN) lost 0.6% and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) declined 0.1%.
Trump Deals Affected Dow and S&P 500
The loss and gains that occurred on Monday were shortly after the US president, Donald Trump, approved the extension of the coronavirus relief package. The extended orders which Trump signed over the weekend covers deferment of student loan payments through 2020 and a provision of a payroll tax holiday. Moreover, the signed orders extended the unemployment benefits that started in March during the peak of the coronavirus pandemic.
Earlier this month, there were arguments regarding the $600 unemployment boost. Democrats were willing to extend the payment after the original six month-plan elapsed. However, Republicans stood against it, referring to the payment as “disincentive to work”.
Before now, the unemployment relief benefit was $600 per week. However, the new extension reduced it to $400 per week. This development leaves the President facing a legal challenge because the recently signed orders will require federal funding, which is controlled by Congress.
The chief investment officer at Stone Investment Partners, Bill Stone, wrote:
“While this move by Trump may lead to legal challenges, politically, it puts pressure on Congress to reach a deal.”
According to a CNBC report, Treasury Secretary, Steven Mnuchin said Democrats are willing to “put more money on the table” to continue the coronavirus relief package.
Current Dow and S&P Figures
At the moment, the Dow is at 28,077.73, climbing 1.04% from its previous close at 27,791.44. The climb of more than 288 points confirms a steady growth in the Dow. In the past five days, the DJI has grown nearly 5%, pulling in 5.42% in the past month. Over three months, it has increased more than 18% and nearly 7% in 1 year. However, the Dow has lost almost 2% in 2020.
After closing at 3,360.47, the S&P 500 is presently at 3,369.58. This is an increase of 0.27% in the last 24 hours. The S&P 500 index has been increasing in the last twelve months, with more than 4% in its year-to-date performance. It also climbed over 17% in the last three months and over 5% in the past month.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.