The Dow jumped more than 500 points on the day as investors eased about a rebound in US Treasury yields.
The trading climate is also boosted by the US approval of the novel coronavirus vaccine. Of Johnson & Johnson (J&J), as well as the US House of Representatives voted to approve the stimulus package over the past weekend.
As of 9:43 GMT, the Dow Jones Industrial Average stood at 31,441.69, plus 509.32 points or 1.65%.
Investors are flocking to buy stocks that will benefit from the economic recovery. As a result, stocks of energy, finance and airlines rose today.
The US Centers for Disease Control and Prevention (CDC) unanimously approved the COVID-19 vaccine. According to Johnson & Johnson (J&J), the vaccine was approved by the US Food and Drug Administration (FDA) on Saturday.
The yield on 10-year US Treasury bonds tumbled to 1.43 percent today after hitting 1.6 percent last week. Which is the highest level since Feb.2020 It was boosted by strong US economic numbers, expectations for a broader economic recovery from the COVID-19 vaccine, as well as a surge in inflation expectations from the 1.9 stimulus package. Trillion dollars
The US 10-year bond is the benchmark bond used to determine the global bond’s price. This includes the mortgage loan interest rates. And US car loan interest rates Which if the government bond yields rise Will reduce the money in consumer spending As the cost of paying interest on the loan increases. And companies will face higher costs from debt repayments. This will make these companies reduce their investment. And reduce the dividend payment to investors
The US House of Representatives voted in favor of the $ 1.9 trillion stimulus package over the weekend. And it is now in the Senate hearing. Before sending it to President Joe Biden signed the endorsement into law.
U.S. House Speaker Nancy Pelosi expects the approval of the stimulus process to be completed by March 15, the day the unemployment measures affected by COVID-19 expire.
Congress previously approved the fast track approval of President Joe Biden’s $ 1.9 trillion stimulus package, using a budgeting approach known as budget reconciliation. This will pave the way for the House of Representatives and the Senate to certify the budget with more than half a vote. Instead of using two thirds of the votes for passing the general law. This allows such stimulus to pass Congress without the need for Republican support.
Democrats now occupy a majority in the US House of Representatives. In the Senate Democrats and Republicans have equal votes of 50-50, so the Senate’s approval of the stimulus measures. Requires one decisive vote from Vice President Kamala Harris. Which will vote as President of the Senate by office, also provided that Democratic senators will not be able to split a single vote.
Investors had their eyes on the Federal Reserve’s monetary policy meeting on March 16-17, after Fed Chairman Jerome Powell said in a half-year statement to Congress last week: The Fed will continue its monetary easing policy. While signaling to freeze interest rates near 0% for the next 3 years
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