U.S. markets and stock exchange traded funds strengthened Wednesday as Joe Biden is sworn in as the 46th U.S. president, while upbeat earnings, notably out of Netflix, supported growth stock momentum.
On Wednesday, the Invesco QQQ Trust (NASDAQ: QQQ) rose 2.4%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was up 0.8%, and iShares Core S&P 500 ETF (NYSEArca: IVV) gained 1.5%.
Netflix rallied after it stated it would no longer borrow billions of dollars to finance its TV shows and movies, Reuters reports.
Meanwhile, the rest of the FAANG group, which will report quarterly results in the weeks ahead, surged on a broad growth rally.
“People are back to looking at technology as a part of the market that can do well whether COVID stays a problem or is eventually pushed to the side,” Rick Meckler, partner at Cherry Lane Investments, told Reuters.
Earnings results have so far been better than expected, with 88% of reporting companies beating expectations, the Wall Street Journal reports.
Along with expectations of a rebound in profit growth this year and a recovery in economic activity, market observers argued that the foundation for further stock market gains is in place.
“Restrained inflation, low interest rates and rising earnings provide valuation support and the basis for stocks to trend higher,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said in a note, adding that favorable growth trends for communications stocks like Netflix, along with those in the tech, consumer discretionary, and health-care sectors, remain intact.
Biden hit the ground running, signing 15 executive orders on issues ranging from the COVID-19 pandemic to the economy to climate change. Investors remain optimistic that the fiscal stimulus will support businesses, with growing expectations that additional aid is coming as Democrats take control of the government.
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