U.S. stocks climbed to record highs on Monday as investors cheered a strong bounce in U.S. job growth last month amid accelerating vaccine rollout.
The Dow Jones Industrial Average rose 340 points to an all-time high. The S&P 500 gained 1.2%, hitting a new intraday record after closing above 4,000 for the first time on Thursday. The tech-heavy Nasdaq Composite also climbed 1.2%.
The Labor Department reported Friday that nonfarm payrolls increased by 916,000 in March, the highest since August 2020, while the unemployment rate fell to 6%. Economists surveyed by Dow Jones were expecting an increase of 675,000 and a jobless rate of 6%.
“This reflects the lifting of restrictions, ramp-up in vaccinations and boost provided by the fiscal stimulus,” said Anu Gaggar, senior global investment analyst at Commonwealth Financial Network. “Faster jobs and wage growth can have an upward pressure on prices and test the Fed’s patience with easy monetary policy.”
Tesla shares popped more than 5% as the electric vehicle company reported production and delivery figures that broadly beat expectations.
Classic reopening plays like airlines and cruise operators outperformed. American Airlines and United jumped more than 4% each, while Carnival and Norwegian Cruise Line gained 5.9% and 7.8%, respectively.
The stock market is building on its recent strength after President Joe Biden introduced his multitrillion-dollar infrastructure proposal, which focuses on rebuilding roads, bridges and airports, expanding broadband access and boosting electric vehicle use and updating the country’s electric grid. The plan will be funded partly by a hike in the corporate tax rate to 28%.
Treasury Secretary Janet Yellen on Monday will push for a global minimum tax in an effort to keep companies from relocating to find lower rates, according to a report from Axios that was confirmed by CNBC. Yellen will address a Chicago Council on Global Affairs conference this morning.
However, Biden’s plan faces opposition among Republicans as the $2 trillion plan includes initiatives that they say extend beyond traditional infrastructure issues.
Republican Sen. Roy Blunt of Missouri on Sunday urged the Biden administration to pare back the package to roughly $615 billion and concentrate on physical infrastructure such as roads and airports.
Senate Minority Leader Mitch McConnell, R-Ky., said last week that Biden’s plan would not receive Republican support and vowed to oppose the broader Democratic agenda.
On the pandemic front, the U.S. reported another daily record of new Covid vaccinations Saturday, pushing the weekly average of new shots per day above 3 million.