Recovery and value stocks helped send the S&P 500 and Dow Jones to yet another record close on the day after the Infrastructure bill made it through the Senate.
Value stocks were in the spotlight today after the passing of the infrastructure bill in the Senate initiated a rotation into cyclical sectors. The result was new record closes for the Dow Jones and S&P 500 .
It was another inside day for the Nasdaq as the market entered the week with caution. The Delta variant of the virus continues to rise while positive employment data is turning the Fed toward more tapering discussion. The combination drove the dollar higher and Treasury prices lower.
Where does the market want to go next? That is the question to be answered after a week of mixed economic news met with COVID fears and uncertainty around what’s happening with the infrastructure bill and government debt. Equity markets set new record highs as Treasury yields rose, setting up a possible pivot for next week.
Several sectors rallied into the lead throughout the week, but Financials ( XLF ) came from behind to end the week as the top sector.
The S&P 500 and Dow Jones closed at new record highs while the Nasdaq pulled back in a rotation from growth to cyclical sectors. Positive employment data in the morning added to the possibility of agreement on a $1 trillion infrastructure bill that pushed investors towards the cyclical sectors.
The indexes set records again today after the morning jobless report came in better than expected. The anticipation of more positive news in Friday’s employment data sent Treasury Yields and US equities higher.
Only two sectors advanced today in a small gain for the Nasdaq while other major indexes took a step backward. Employment data disappointed investors already worried about the impact of the resurgence in the COVID pandemic, while the Fed’s Clarida signaled possibly earlier tapering and interest rate hikes.
Investors shrugged off worries of the Coronavirus Delta variant and turned bullish on a robust earnings week. After a morning dip, indexes moved higher, with the S&P 500 getting another record close. Apple and Health stocks led the way.
Despite being at a historically high level, Manufacturing activity data was lower than the previous month and lower than expectations. The result was a failed morning rally that took indexes higher before selling off in the afternoon. The only positive holding back more selling was the progress of the Infrastructure bill in congress.