US stocks head for more record highs as investors cheer upbeat earnings and Joe Biden’s stimulus plans

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President Joe Biden has pledged to act fast on stimulus, boosting market optimism Tom Brenner/Reuters

US stocks were set to notch up more record highs on Thursday, as upbeat company earnings and President Joe Biden’s stimulus plans combined to lift markets.

Investors rotated out of the dollar on Thursday morning, while Asian stocks rose sharply overnight on the premise that more spending from the US government will aid the global economy.

On Wall Street the previous day, better-than-expected earnings from Netflix sparked a market rally that saw the tech-heavy Nasdaq jump 1.97% to a new record high. The S&P 500 climbed 1.39% while the Dow Jones rose 0.83%, also both hitting new all-time peaks.

The inauguration of Joe Biden as the 46th president helped the bullish mood, with his plans to “act big” with $US1.9 trillion of stimulus broadly welcomed by markets, although some Republican opposition means the final total will likely be smaller.

“US stocks roared higher on strong tech earnings and as President Biden was sworn in and is widely expected to unleash several well-telegraphed executive orders,” said Edward Moya, senior market analyst at currency firm Oanda.


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Stocks’ momentum was set to continue on Thursday, albeit at a slower pace, with Nasdaq futures up 0.45%. S&P 500 futures were 0.15% higher while Dow Jones futures were up 0.03%.

“A new era is beginning and investors pile back into equities thanks to assurances from both Treasury Secretary nominee [Janet] Yellen and Fed chair [Jerome] Powell that the US economy needs more help,” Moya said.

European stocks opened higher on Thursday, with the Stoxx 600 up 0.41% ahead of the European Central Bank’s policy decision. The UK’s FTSE 100 was roughly flat.

Markets will be keeping a keen eye on Biden’s moves in his first few days. Gregory Daco, chief US economist at consultancy Oxford Economics, said in a note: “We expect quick action on more fiscal stimulus, delivering another significant boost to the 2021 recovery.”

Asian stocks rose overnight as investors welcomed Biden’s presidency and focus on stimulus. China’s CSI 300 climbed 1.62%, South Korea’s KOSPI rose 1.49% and Japan’s Nikkei 225 climbed 0.82%.

The dollar index was down 0.29% to 90.21 on Thursday morning as investors sold the safe asset in favour of stocks. The greenback has fallen in recent days after strengthening at the start of 2021 as bond yields rose amid the emphasis on more spending.

Lee Hardman, currency analyst at MUFG, said in an note: “The move higher in long-term US yields has clearly failed to meaningfully derail the strong improvement in global investor risk sentiment.”

Netflix’s results yesterday sparked renewed interest in major tech stocks. The earnings – which showed paid subscribers have risen past 200 million and hinted at stock buybacks – reminded markets that tech has been the big winner from the coronavirus pandemic.


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Morgan Stanley also capped off a solid run of earnings from Wall Street, with trading and investment banking revenues up sharply.

The yield on the 10-year US Treasury note slipped 0.8 basis points to 1.082% on Thursday morning, as bond prices rose after recent falls.Gold fell 0.13% to $US1,869.63 per ounce, while bitcoin fell 7.87% to $US32,675.

Oil prices also dipped after rising sharply in the opening weeks of 2021. Brent crude – which has risen around 8% this year so far – fell 0.95% to $US55.55 per barrel. WTI crude was down 0.96% to $US52.81 a barrel.

Investors will be watching the European Central Bank’s interest rate decision later on Thursday, although the bank is not expected to change policy.