Nasdaq closes at record high as stimulus cheer offsets elevated valuations
- US stocks were mixed on Tuesday, though the Nasdaq closed at record highs as investors saw upcoming stimulus as a big enough boon to extend the month's rally.
- The S&P 500 ended a streak of gains, while the Dow also closed lower.
- Bitcoin surged above $48,000 for the first time as momentum from Tesla's $1.5 billion purchase charged on.
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The Nasdaq closed at a record high on Tuesday as optimism around President Joe Biden's stimulus proposal outweighed concerns of stretched valuations.
The S&P 500 broke a six-day streak of gains after hitting a new record on Monday, while the Dow Jones Industrial Average also closed lower.
Bullish sentiments in recent sessions have been boosted by the Biden administration's plans to push a large-scale stimulus package through Congress. Though President Joe Biden indicated throughout his campaign that he aims to work in a bipartisan fashion, his administration has warmed up to passing fiscal relief through reconciliation and without Republican support.
Hopes for fresh stimulus and the encouraging pace of COVID-19 vaccinations now square off with lofty prices. Stocks have notched charged multiple record highs in February, placing more pressure on market participants to secure profits. Expectations for stronger inflation could also weigh on the growth stocks that still boast extraordinary weight in benchmark indexes.
Here's where US indexes stood at the 4 p.m. ET close on Tuesday:
- S&P 500: 3,911.26, down 0.11%
- Dow Jones Industrial Average: 31,375.69, down 0.03% (9.93 points)
- Nasdaq composite: 14,007.70, up 0.14%
Communication services and real estate stocks led the S&P 500 higher. Materials, energy, and consumer discretionary stocks fell.
Despite equities' steady climb higher, indicators tracking economic activity have yet to show the same trend. The National Federation of Independent Businesses' survey of business-owner optimism fell 0.9 points last month to 95, according to a Tuesday release. The gauge has now reversed nearly three-quarters of its recovery.
Friday's nonfarm payrolls report showed a similarly disappointing read, with job additions coming in at less than half of what economists expected. Some took the gloomy report as a sign Democrats would accelerate plans to pass stimulus.
Earnings season continues after the close with Twitter and Cisco slated to report quarterly figures. Goodyear gained after the tire manufacturer reported a quarterly profit and better-than-expected sales.
Glu Mobile surged after Electronic Arts agreed to a $2.4 billion acquisition. The deal bolsters EA's offerings in the mobile-gaming segment with titles including Design Home and Covet Fashion.
Tilray gained after announcing it inked a deal with Grow Pharma to distribute medical cannabis products in the UK. Pot stocks have thrived in 2021 amid hopes the US will federally decriminalize marijuana and rapidly expand the burgeoning market.
Coty tumbled after the beauty-products company reported quarterly revenue that landed below estimates.
Bitcoin leaped even higher as momentum from Tesla's $1.5 billion purchase continued into its second day. The largest cryptocurrency rose above $48,000 for the first time before relinquishing some gains and stabilizing just above $47,000.
Crypto bull Mike Novogratz said bitcoin could soon trade at $100,000 as more institutions divert cash to the token.
Spot gold rose roughly 1%, to $1,848.60 per ounce, at intraday highs. The US dollar weakened against a basket of Group-of-20 currency peers and Treasury yields wavered.
Oil rose for the seventh-straight session as hopes for stronger demand buoyed prices. West Texas Intermediate crude gained as much as 1.1%, to $58.62 per barrel. Brent crude, oil's international benchmark, climbed 1.1%, to $61.25 per barrel, at intraday lows.