House Democrats Pass $3.5tn Budget Blueprint, Stocks at Records
The House of Representatives approved a $3.5tn framework. Stocks continue on their upward path, S&P500 and Nasdaq seal new record highs.
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- The US House of Representatives approved a $3.5tn budgetary framework
- Stocks continue on their upward path, S&P500 and Nasdaq seal new record highs
Democratic leaders in the US House of Representatives narrowly advanced a $3.5tn spending package on Tuesday. The passage of the budget blueprint in a 220-212 vote marked a major step toward enacting the bigger part of President Biden’s economic agenda.
The step also locked in a vote in late September on the $1tn infrastructure bill that was recently passed in the Senate with bipartisan support. The framework passed yesterday would allow the House to move forward with a more precise budget proposal at the next stage later in the year.
As the agreement between House Democrats over the budgetary framework was widely expected, the market was rather unfazed and kept on its upward trajectory in a quiet trading session Tuesday.
The Dow Jones Industrial Average ticked up about 30 points, or less than 0.1%, to settle at 35,366.26. The other two major equity benchmarks, the S&P500 and the Nasdaq Composite extended their upside moves from a day earlier and closed at new all-time highs.
The broad-based blue-chip index edged higher by 6.70 points to 4,486.23, logging its 50th record close of 2021. The Nasdaq Composite was the best performer among the three. The tech-heavy index added half a percent, or 77.15 points, to close the day at 15,019.80.
The record closings for both the S&P500 and the Nasdaq Composite came despite Delta variant fears and ahead of the major Federal Reserve conference at Jackson Hole. Additionally, the full approval for the Pfizer vaccine from the US Food and Drug Administration helped power the upside move.
While many investors expect the Federal Reserve to present a detailed timeline for its tightening plans by the end of the year, that has not stopped them from further exposing their portfolio to the equity class, regarded as riskier among others.
Mixed Trading Characterizes European Markets
Market participants are anticipating the Jackson Hole symposium with mixed moods. Some expect the Fed’s chair Jerome Powell to reveal more insights into the US central bank’s withdrawal of the $120bn-a-month asset purchase scheme. Other money managers project Fed officials will not make any major announcements at the three-day meeting starting Thursday.
The Federal Reserve already indicated the majority of policymakers agree to reduce their bond-buying program before the end of the year. As the US central bank has three more policy meetings this year, analysts and economists largely expect the Fed will start tapering in the fall.
Meanwhile, European markets are moving sideways in the early hours of the European session. The pan-continental Stoxx 600 opened for trading slightly higher, while major bourses across the old continent traded mixed, gyrating around the flat line.
Futures contracts tied to the major US stock gauges are modestly in the green ahead of the opening bell today. Dow Jones Industrial Average futures are higher by just around 10 points. S&P500 and Nasdaq futures pointed up by less than 0.1% in pre-market trading.
Bitcoin is staging a comeback today after it slipped roughly 2.5% on Tuesday. The original cryptocurrency is now trading near $48,500, up about 2% from its session low earlier in the day. The entire crypto asset space now hovers above the $2tn market cap threshold. Bitcoin commands a market share of $910bn, or a little less than 44% of the total valuation of cryptocurrencies.