U.S. markets and stock exchange traded funds rose Tuesday with the S&P 500 pushing toward its first record close since February and on pace for its eighth consecutive day of gains.
On Tuesday, the Invesco QQQ Trust (NASDAQ: QQQ) was down 0.3%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) rose 1.1%, and SPDR S&P 500 ETF (NYSEArca: SPY) gained 0.5%.
The S&P 500 was just shy of its all-time high on February 19 when investors started ditching equity markets ahead of the worst U.S. economic contraction since the Great Depression, Reuters reports.
U.S. benchmarks, though, have staged a swift recovery as near-zero interest rates, trillions of dollars in both fiscal and monetary stimulus, and better-than-expected corporate earnings helped fuel a risk-on rally in equities. More recently, market observers are betting on a vaccine that will help push lingering coronavirus uncertainties aside.
“COVID-19 really turned the light switch off on the economy – it happened very quickly – and the hope is that by and large, once we get a vaccine and distribute it to the masses, that we turn the switch back on,” John Petrides, portfolio manager at Tocqueville Asset Management, told Reuters.
Further adding to vaccine bets, President Vladimir Putin claimed Russia had become the first country in the world to provide regulatory approval to a COVID-19 vaccine. However, some experts showed skepticism as the vaccine has not met complete final trials.
Meanwhile, investors are still looking to Capitol Hill for Republicans and Democrats to resolve their issues and come together to sign another economic relief program in support of the 30 million unemployed Americans.
“The U.S. fiscal stimulus is absolutely critical to keeping market momentum positive,” Nicholas Brooks, head of economic and investment research at Intermediate Capital Group, told the Wall Street Journal. “Markets are assuming that ultimately Congress will come through with a package and that there’s a lot of brinkmanship going on.”
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