US stocks surged again in what’s shaping up to be the market’s best week in months. States are still counting election votes, but Wall Street is growing increasingly confident — and excited — the result will be a divided government.
Even though a delayed election result was deemed the “nightmare scenario” before the vote, stocks have rallied every day this week. Investors are hoping Joe Biden will take the White House while Republicans will keep the Senate, and that such as combination will lead to more moderate policies including a quick stimulus deal but limited tax increases.
All three indexes are on track for their best week since April. The Dow is up more than 7% this week. The S&P 500 has risen nearly 8% while the Nasdaq has jumped 9%.
To put the markets’ roller coaster ride in perspective, stocks recorded their worst week since March last week, when investors were fretting about the election outcome and rising Covid-19 infections.
While the presidential race to 270 electoral votes is front and center, there are plenty of other things for market watchers to focus on Thursday.
The Labor Department reported that first-time claims for unemployment benefits declined, though by less than economists had hoped. Total initial claims, including for Pandemic Unemployment Assistance that provides aid for the self-employed and others, stood at 1.1 million. That level has been more or less flat over the past weeks.
On top of that, the number if workers on the Pandemic Emergency Unemployment Compensation program, which provides benefits for those who have exhausted their state benefits, rose to nearly 4 million.
That’s not great news for the jobs recovery.
Meanwhile, the Federal Reserve concluded its two-day policy meeting at 2 pm ET. As expected, the Fed left rates unchanged. Fed Chairman Jerome Powell held a press conference at 2.30 pm ET.
The central bank indicated in September that interest rates will stay at their ultra-low levels for years to come.
Powell has reiterated in every speech over the past few months that more fiscal stimulus was needed to get the economy through this crisis, and he stressed that again Thursday.