S&P 500 Index Breaks Through 4000 Level for the First Time Ever

by Paek Jongmin

Published 02 Apr.2021 05:46(KST)

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Baek Jong-min] The U.S. government's announcement of a massive $2.25 trillion infrastructure investment has driven the S&P 500 index above the 4000 mark for the first time ever. This infrastructure investment also acted as a tailwind for the overall New York stock market.

On the first day of the second quarter, April 1 (local time), the Dow Jones Industrial Average rose 171.66 points (0.52%) to close at 33,153.21, the S&P 500 index increased 46.98 points (1.18%) to 4,019.87, and the Nasdaq index surged 233.24 points (1.76%) to finish at 13,480.11.

The S&P 500 rose from 3000 to 4000 in 434 trading days, marking the shortest period for a 1000-point increase in the index's history.

Despite the large-scale infrastructure investment announcement, U.S. Treasury yields remained stable, leading to broad strength not only in tech stocks but also in cyclical stocks. While tech giants like Apple and Microsoft showed gains, Tesla, which had rebounded on expectations of the Biden administration's electric vehicle infrastructure investment, fell 0.93%.

The U.S. 10-year Treasury yield dropped to around 1.680%. Despite the large infrastructure investment plan announcement, it fell below 1.7% again, stabilizing risk asset investment sentiment.

The number of initial jobless claims announced that day was 719,000, an increase of 61,000 from the previous week. Although this was below the market expectation of 675,000 and rose back above the 700,000 mark, the market did not show significant concern.

The Institute for Supply Management (ISM) Manufacturing Purchasing Managers' Index (PMI) for March rose from 60.8 in the previous month to 64.7, the highest level since December 1983. It also exceeded the market expectation of 61.7. The manufacturing PMI recorded expansion for the tenth consecutive month.

Oil prices were strong despite OPEC Plus (OPEC+) agreeing to allow increased production starting next month. Optimism about economic recovery fueled the rise in crude oil prices.