S&P 500 closes with a file, Dow rises 320 factors as Biden reaches an infrastructure contract

US stocks jumped to session highs, with the S&P 500 hitting a record Thursday after President Joe Biden declared the White House had signed an infrastructure deal with a bipartisan group of Senators.

The S&P 500 rose nearly 0.6% to hit a record closing high of 4,266.49, resuming its previous June 14 record and fully making up for losses caused by the Federal Reserve’s surprise move. The Dow Jones Industrial Average added 322.58 points, or about 1%, to 34,196.82 points, about 2.6% from its all-time high. The Nasdaq Composite rose 0.7% to hit another record at 14,369.71.

The infrastructure deal will include $ 579 billion in new spending, the White House said. Republicans have opposed the president’s proposal to raise the corporate tax rate from 21% to 28%.

A broad group of stocks gained to push the benchmarks to new highs. Financials, energy and communications services were the top performing sectors on Thursday. Tesla was up 3.5% while Caterpillar was up 2.6%.

The blue-chip Dow had its worst week since October, down 3.5% last week after the Fed raised inflation expectations and forecast interest rate hikes back in 2023, hawkish sentiment. The S&P 500 fell 1.9% last week.

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Fed chairman Jerome Powell’s comments during a congressional hearing on Tuesday reiterated that inflationary pressures should be temporary, which appeared to alleviate market volatility.

“As the market hits new highs this week, investors could come to terms with the inevitable Fed hike,” said Mike Loewengart, managing director of investment strategy at E-Trade.

Data released Thursday showed that unemployment claims totaled 411,000 for the week ending June 19, more than an estimate of 380,000 by economists polled by Dow Jones.

“The passages read are further proof that the economy is coming back to life, albeit perhaps a little more bumpy than some expected at the time,” said Loewengart.

Bank stocks rose ahead of the Fed’s annual stress test results, due to be released on Thursday after the bell. The test examines how banks behave during various hypothetical economic downturns. Banks were forced to freeze dividends and stop buying back during the pandemic. These results should give them the green light to eventually increase their payouts. Goldman Sachs stocks were up 2.1% while JPMorgan was up nearly 1%.

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