Stocks bubbled even higher on Wednesday, vaulting Wall Street back to where it was just one week after it set its all-time high earlier this year, as optimism builds that the economy can climb out of its current hole relatively quickly.
The S&P 500 rose 1.4% for its fourth straight gain as lockdowns loosen around the world and raise hopes for a coming economic recovery. Treasury yields also strengthened in a sign of improved confidence after reports suggested that while the U.S. economy is still getting pummeled, it may not be as bad as economists had feared.
“It’s fairly clear to us that the economy clearly bottomed in late April and early May,” said James Ragan, director of wealth management research at D.A. Davidson. “At some point the concern will be on the pace of the recovery and not just the recovery itself.”
The S&P 500 rose 42.05 points to 3,122.87, the latest upward move in its nearly 40% surge since late March. The index is back above where it was on Feb. 26, one week after setting its record.
The Dow Jones Industrial Average gained 527.24 points, or 2%, to 26,269.89, and the Nasdaq composite rose 74.54, or 0.8%, to 9.682.91.
Smaller stocks were also among the market’s biggest winners, as they often are when expectations are rising for the economy’s strength. The Russell 2000 index of small-cap stocks rose 2.4%.
Stocks that had been stalwarts earlier when investors were building portfolios that could win in a stay-at-home economy, meanwhile, were lagging. Netflix fell 1.2%.