Stock Market Reaches Record High on Heels of Biden Infrastructure Plan Announcement
The S&P gained roughly 0.7% after the opening bell Thursday morning, surpassing 4,000 for the first time in history.
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Find: Biden Unveils $2 Trillion American Jobs Infrastructure Plan, Along With Made in America Tax plan
Increases in tech shares alongside positive expectations for global economic recovery powered the index to its new historic height.
Wednesday, the S&P closed up 0.4% ahead of President Biden’s speech. Biden outlined his massive $2 trillion infrastructure plan in Pittsburgh, Pa., Wednesday afternoon.
The plan involves funding for a number of infrastructure improvements to increase economic productivity over time. Special attention will be paid to public transportation and rural broadband connections, The Wall Street Journal reports.
Focus will also be on road and bridge repair, research and development and substantial investments in clean-energy technology.
The proposal will fund $621 billion towards modern transportation, $213 billion building affordable housing, $100 billion towards broadband access and $300 billion to boost manufacturing.
Funding for the proposal will largely come from proposed increased corporate taxes. The hike has been a recent area of contention amongst Republican lawmakers and Wall Street CEOs who oppose increased corporate taxes and argue it will hinder recovery efforts.
House Ways and Means Committee member Kevin Brady (R-Texas) said the spending proposal amounts to an economic “sugar high,” Roll Call reports. He stated that as a result, the U.S. corporate income tax rates would be amongst the highest in the developed countries.
Senate Minority Leader Mitch McConnell (R-Ky.) “labeled Biden’s plan a ‘Trojan horse’ for tax hikes and liberal social policy changes that Republicans want no part of,” Bloomberg reports. “This is not a very bipartisan period we’re in right now,” he said.
Despite the resistance, the stock market roiled on, with tech stocks performing particularly well among the expected investment into the sector.
Electric-vehicle stocks Workhorse Group and Plug Power increased after Biden’s plan highlighted an investment in building half a million EV charging stations, MarketWatch reports. Tesla, one of the largest producers of electric cars and headed by CEO Elon Musk, was also up.
The Nasdaq also gained around 1% shortly after the opening bell, also largely driven by technology stocks.
Global stock markets have also reacted to Biden’s news. U.S. futures rose Thursday morning on the heels of South Korea and Japan reporting strong economic data in conjunction with news of the infrastructure spending in the US. London and Frankfurt rose as well, with Shanghai, Tokyo, and Hong Kong all closing higher, AP reports.
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