Wall Street closed sharply higher on Wednesday as Joe Biden took the charge of 46th U.S. President. Expectations of higher fiscal stimulus and strong fourth quarter 2020 earnings results bolstered market participants’ confidence. All the three major stock indexes ended in the green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) surged 0.8% or 257.86 points to close at 31,188.38, marking its all-time closing high. Notably, 22 components of the 30-stock index ended in the green while 8 in red. The blue-chip index also recorded all-time intraday high at 31,235.98.

The Nasdaq Composite finished at 13,457.25, appreciating 2% or 260.07 points due to strong performance by large-cap tech stocks. This was the tech-heavy index’s all-time high closing. During intraday trading, the tech-laden index recorded an all-time high at 13,486.13.

Meanwhile, the S&P 500 advanced  1.4% to end at 3,851.85, reflecting its all-time closing high. The Real Estate Select Sector SPDR (XLRE), the Communication  Services Select Sector SPDR (XLC) and the Technology Select Sector SPDR (XLK) climbed 2.1%, 3.1% and 2%, respectively. Notably, ten out of eleven sectors of the benchmark index closed in the green and one in red. During intraday trading, the broad-market index recorded an all-time high at 3,859.75.

According to Dow Jones Market Data, both the Dow and the S&P 500 posted their best Presidential Inauguration Day gains since Ronald Reagan took the oath of office for his second term in 1985. Moreover, the Nasdaq Composite registered the best Presidential Inauguration Day rally on record.

The fear-gauge CBOE Volatility Index (VIX) was down 7.1% to 21.58. A total of 13.66 billion shares were traded on Wednesday, higher than the last 20-session average of 12.83 billion. Advancers outnumbered decliners on the NYSE by a 2.02-to-1 ratio. On Nasdaq, a 1.24-to-1 ratio favored advancing issues.

Markets Wait for Higher Stimulus

On Jan 14, President Joe Biden proposed a  new $1.9 trillion coronavirus-aid package called “American Rescue Plan”. The proposed plan will include increasing direct payments to $2,000 from existing $600 and supplemental unemployment benefits to $400 per week through September. Minimum wage rate to be hiked to $15 per hour and moratoriums on eviction and foreclosure on mortgages to be extended to Sep 30.

The plan will include $20 billion for a national vaccination program, $50 billion for COVID testing, and $350 billion aid to state and local governments. In addition, the plan will provide $130 billion for reopening of schools, $35 billion for higher education and $5 billion for a “Hardest Hit Education Fund.”

Notably, on Jan 19, Janet Yellen, Biden’s designated nominee for Treasury Secretary, endorsed higher aid spending.