Stocks close at record highs on first day of Biden presidency

The stock market rallied on the first day of President Biden’s term, pushing three major U.S. indexes to new records.

The Dow Jones Industrial Average rose 257 points to finish Wednesday at a record high close of 31,188. The S&P 500 finished Wednesday with a 1.4 percent gain and set a new intraday record at 3,859 points, and the Nasdaq rose 2 percent to close at a record 13,457.25.

While the stock market is driven by innumerable forces, Wednesday’s rally is the latest sign of Wall Street optimism that more economic relief and vaccine distribution funding could be on the way soon from the Biden administration.

Biden has proposed a $1.9 trillion bill to bolster vaccine distribution, fund other aspects of pandemic response, and provide more aid to a struggling U.S. economy. While the U.S. has recovered quicker than many economists have expected, the country lost jobs in December for the first time since April, and many of those who’ve yet to find work since then are in deep financial peril.

Treasury secretary nominee Janet Yellen urged senators to “act big” on economic relief during her confirmation hearing Tuesday, arguing that the costs of inaction would be much greater for the U.S. economy.

“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden,” Yellen said. “But right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”

Stocks have risen with few interruptions since Biden’s victory over former President Trump, largely on the expectation of more fiscal stimulus and ample support from the Federal Reserve through floor-low interest rates. While Trump claimed the stock market would crash if Biden was elected—as he had before Democrats took control of the House in 2018—Wall Street veterans said the market would likely keep rising regardless of who won the election. 

The market was also propelled by several strong quarterly earnings reports, including from Netflix, which rose nearly 17 percent Wednesday.

The rise in Netflix stock came after the company beat expectations for new subscribers predicted earlier in the year. The streaming giant predicted that a pandemic-driven surge in memberships in March and April would pull from future additions in the winter.

Updated 4:21 p.m.