More records for stock indexes as stimulus bill becomes law

Broad gains in stocks pushed several major indexes to all-time highs on Wall Street on Wednesday.

The S&P 500, the Dow Jones industrial average and the Russell 2000 measure of small-company stocks all closed at record levels on Thursday.

The tech-heavy Nasdaq rose 2.5%, but remains below the record high it set last month.

The S&P 500 rose 40.53 points, or 1%, to 3,939.34. The Dow Jones industrial average increased 188.57 points, or 0.6%, to 32,485.59.

The Nasdaq jumped 329.84 points, or 2.5%, to 13,398.67. And the Russell 2000 index of smaller companies moved up 52.86 points, or 2.3% to 2,338.54.

Jobless claims fell more than forecast, signaling labor-market momentum as President Joe Biden signed the bill Thursday ahead of a prime time address to the nation. The dollar slumped versus major peers.

“The administration has slipped a little bit of extra fuel to the equity markets with their bill. It’s going to be rocket fuel,” said Chris Gaffney, president of world markets at TIAA Bank. “We’re headed to new highs because of all that stimulus money that’s being put out there and it’s more broad-based than the first couple stimulus programs.”

Chipmakers paced the tech advance. Twitter Inc. jumped 5.7%, while Tesla Inc. continued its recovery. Korean e-commerce giant Coupang Inc. popped 41% in its market debut. Verizon Communications Inc. saw surging demand for its $25 billion debt sale.

The 10-year Treasury yield pared an increase after an auction of 30-year notes.

Risk assets resumed their broad rally with vaccinations rolling out around the world and the U.S. poised to notch economic growth not seen since the 1980s. Concern that explosion would deliver a bout of inflation eased after Wednesday’s weaker-than-expected report on consumer prices, while Thursday’s report on jobless claims showed plenty of slack in the labor market.

The recent return of stability to the bond market has been reassuring investors after a sudden spike in long-term interest rates over the past month prompted traders to dump tech shares, which started to look expensive after months of gigantic gains.

Up until this week, bond yields have been steadily climbing higher as investors made big bets that trillions of dollars of coming government stimulus will result in strong economic growth later this year and potentially some amount of inflation. As of Thursday afternoon, the yield on the 10-year Treasury note was 1.53%, roughly where it has been all week. That yield struck the psychologically important 1.60% mark late last week.

“We’re entering this environment where growth is going to be higher than expected,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “With higher growth you get higher interest rates.”

Much of the uncertainty facing the market at the beginning of the year has faded, he said, as vaccine distribution ramped up and businesses reopened. The latest round of stimulus from Washington is also helping to lift uncertainty about the recovery.