US Stock Market Relieved by Biden's Victory (Comprehensive)

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. stock market rose again as centrist candidate former Vice President Joe Biden defeated Sanders in the Super Tuesday primaries held the day before. The U.S. stock market has experienced multiple sharp fluctuations this week alone, which is interpreted as reflecting the uncertainty surrounding the U.S. presidential election and concerns over the novel coronavirus infection (COVID-19).

On the 4th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average surged 4.53% (1,173.45 points) to close at 27,090.86, the S&P 500 index rose 4.22% (126.75 points) to 3,130.12, and the Nasdaq jumped 3.85% (334.00 points) to 9,018.09.

The market rise on this day was largely attributed to a recovery in investor sentiment due to relief that Biden’s resurgence could restrain Sanders, who identifies as a socialist. The previous day, the Federal Reserve (Fed) unexpectedly implemented a 0.5% cut in the benchmark interest rate, causing stock prices to plunge, but the market welcomed Biden’s victory enough to more than make up for the losses. Biden emerged as the frontrunner in delegate count after an unexpected landslide victory in primaries held in 14 states the previous day.

The U.S. presidential election affects stock prices mainly because of Senator Bernie Sanders’ radical stance. When his momentum rises due to his radical pledges, stock prices fall. The capitalist market is extremely averse to the emergence of a socialist presidential candidate. The Federal Reserve cited the U.S. presidential election and COVID-19 as potential sources of instability for the U.S. economy in its Beige Book report released that day.

Kenneth J. Tobes, Chief Investment Officer at Amundi Asset Management, said, "If Sanders becomes the Democratic presidential candidate, the U.S. financial market could face tremendous difficulties. Investors have serious concerns about Sanders’ economic philosophy."

The sharp rise in healthcare-related companies’ stock prices on the New York stock market that day, which had repeatedly underperformed due to concerns over Sanders’ major pledge of Medicare for All, also reflects this situation. The stock price of UnitedHealth Group, the largest health insurer in the U.S., surged more than 10%.

It is also analyzed that the bipartisan agreement by the U.S. Congress on an $8.3 billion budget to respond to COVID-19 fueled the stock market rise. Congress prepared a budget that far exceeded the $2.5 billion requested by President Donald Trump, dispelling concerns about COVID-19 and reflecting the judgment that it could have a positive impact on the economy. President Donald Trump tweeted, "The congressional budget agreement will help protect Americans and keep risks low for workplaces and workers," calling it "good news for health, the economy, and the nation."

On the same day in the U.S., the first COVID-19 death occurred in California, increasing the death toll to 11. In response, California declared a state of public health emergency. In New York, confirmed cases rose to 11, prompting state and city authorities to strengthen quarantine and entry management. As the situation worsened, U.S. Vice President Mike Pence announced plans to devise and implement improvement measures for long-term care facilities where mass deaths occurred.

This content was produced with the assistance of AI translation services.