The stock market surged to a record close Wednesday as President Joe Biden and Vice President Kamala Harris were sworn into office and Democrats became the majority party in Congress.
The Dow Jones Industrial Average spiked 257.86 points, an increase of 0.8%, to a record high of 31,188.38, CNBC reported. The S&P 500 rallied to a record close of 3,851.85, an increase of 1.4%.
“Restrained inflation, low interest rates and rising earnings provide valuation support and the basis for stocks to trend higher,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, recently wrote to clients, according to The Wall Street Journal. (RELATED: US Lost 140,000 Jobs In December, Economists Expected A Modest Gain)
The market has risen more than 13% since Biden’s election victory on Nov. 3, the highest post-election increase since the 8.8% market surge that occurred between former President John F. Kennedy’s 1960 victory and 1961 inauguration, according to CFRA Research, CNN Business reported.
Biden officially became president at noon Wednesday after he took the oath of office in front of the U.S. Capitol. Harris was sworn into office moments before.
The market saw much of its gains after pharmaceutical companies Pfizer and Moderna reported positive large-scale human trial results for their coronavirus vaccines and the federal government began distributing doses. Investors also responded positively to Biden’s appointment of former Federal Reserve chairwoman Janet Yellen to lead the Treasury Department in December.
Yellen suggested that the Biden administration will push a large coronavirus relief package early in Biden’s presidency during her Senate confirmation hearing Tuesday, according to CNBC. Biden released a $1.9 trillion proposed relief bill Thursday, which included $2,000 direct payments to Americans and an additional $400 in unemployment pay per week.
“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden,” Yellen said, CNBC reported. “But right now, with interest rates at historic lows, the smartest thing we can do is act big.”
“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,” Yellen said.
During Trump’s presidency, the stock market hit several milestones as it surged higher than ever before, according to Reuters. However, the coronavirus pandemic caused a significant downturn negating many of those previous gains.