Stocks finished higher Tuesday and the Dow Jones Industrial Average traded above 30,000 for the first time as President-elect Joe Biden was given the go-ahead to formally begin his transition and Wall Street bet more fiscal stimulus would be forthcoming.
The Dow finished up nearly 455 points, or 1.54%, to 30,046, and set an intraday all-time high of 30,116.
The S&P 500 gained 1.62% and the Nasdaq Composite finished up 1.31%.
"Investors are looking out to 2021 and the outlook for economic and earnings data is improving as the uncertainty clouds begin to part," said Lindsey Bell, chief investment strategist for Ally Invest.
"Not only are participants beginning to anticipate more stimulus and spending but also less of a threat from regulatory restriction and a slowdown in the pandemic. The market is setting up for what could be a perfect storm for value and cyclical, supporting a continuation of the outperformance for these groups since the vaccine news started flowing three Mondays ago," Bell added.
Reports said Biden would nominate former Federal Reserve Chairwoman Janet Yellen as treasury secretary. Yellen would be the first woman to lead the department. She also was the first woman to serve as Fed chair after her Senate confirmation in 2014.
Investors expect more economic stimulus is likely with Yellen as treasury secretary since she has argued that Congress has to come through with additional aid to help lead a U.S. economy crippled by the coronavirus pandemic.
Meanwhile, Treasury Secretary Steven Mnuchin will put $455 billion in unspent Cares Act funding into an account that Yellen, his presumed successor, will need authorization from Congress to access, Bloomberg reported.
Mnuchin plans to place the money into the agency’s General Fund, a Treasury Department spokesperson said Tuesday. That fund can be tapped only with “authority based on congressionally issued legislation,” according to the Treasury’s website.
Stocks were higher after the General Services Administration acknowledged Biden as the apparent winner of the Nov. 3 presidential election, reducing political uncertainty and giving Biden access to the funding needed for his transition to president.
President Donald Trump said late Monday that Biden and his incoming administration would be granted access to funding, security briefings and other administration apparatus that will allow for a smoother transition of power on Jan. 20.
Trump continues to allege - without evidence - that the election was riddled with fraud and that he should be named the winner.
While Trump stopped short of a full concession, and vowed to continue to fight his election loss, his move at least removes one of the market's key concerns about a contested election.
"Markets continue to rally as every day it seems we are seeing more and more signs of a normal transition following an extremely tumultuous presidential election," said Anthony Denier, chief executive of trading platform Webull. "An added benefit of a normal transition will be a much awaited and needed stimulus package."
Stocks in the U.S. on Monday closed higher as Wall Street welcomed further progress on the development of a coronavirus vaccine. The Covid-19 vaccine candidate being developed by AstraZeneca (AZN) - Get Report and the University of Oxford was found in a large trial to have prevented a majority of people from getting the disease.
Oil prices rose Tuesday to the highest levels since the global pandemic began in mid-March as investors bet on renewed energy demand and ongoing OPEC supply restrictions heading into next year. West Texas Intermediate crude oil rose 4.27% to $44.90 a barrel on Tuesday.