The S&P 500 rallied as much as 0.7% to breach the 4,000 mark as investors digested President Joe Biden’s $2.25-trillion stimulus plan.
- It took about 21 months for the index to grow 1,000 points, while it took almost five years to rise from the 2,000 milestone to 3,000 in July 2019.
- The surge is driven largely by the climb in energy and financial shares amid the rollout of the COVID-19 vaccination program. This has driven Treasury yields higher and boosted inflation expectations to send cyclical stocks upward.
- Analysts say the reopening of the economy and the vaccine rollout is driving market optimism, along with a broad-based sponsorship across almost all of the S&P sectors.
- Year-to-date, the S&P has climbed 6.5% in 2021 with the energy sector up 29% and the financial sector up 15%. This has boosted the tech-heavy Nasdaq 100 to grow 1.6% in 2021.