Stock Market Today: No Stimulus Deal? No Big Deal to Stocks, Apparently

President Trump balked at Congress' COVID rescue package late Tuesday, but several major indices still managed to finish in the black Wednesday.

White House
(Image credit: Getty Images)

The stock market continued to stubbornly press forward Wednesday in the face of numerous headwinds, including a surprising development in Washington.

Congress on Tuesday passed a $900 billion stimulus package on to President Donald Trump, who was widely expected to sign it but instead lambasted the bill for its $600 direct payments (opens in new tab), demanding a higher level ($2,000) than even Democrats had previously pushed for. He didn't directly threaten to veto the existing bill, however.

"President Trump’s demand for revisions to the COVID relief bill to raise the individual payment amount to $2,000 significantly raises uncertainty for the days ahead, but our base case remains that the bill passed by Congress will become law," say Raymond James analysts, echoing many other experts' sentiments.

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Meanwhile, U.S. COVID hospitalizations hit a record 117,777 yesterday, and economic data was dour – durable-goods order growth decelerated sharply in November, as did U.S. new-home sales.

Nonetheless, the Dow Jones Industrial Average finished with a 0.4% gain to 30,129, and the small-cap Russell 2000 kept up the momentum with a 0.9% jump to a record 2,007.

Other action in the stock market today:

  • The S&P 500 eked out a marginal gain to 3,690.
  • The Nasdaq Composite declined 0.3% to 12,771.
  • Gold futures lost 0.6% to settle at $1,870.30 per ounce.
  • U.S. crude oil futures slumped for a second straight day, losing 2.0% to $47.97 per barrel.

stock chart for 122320

Energy, Financials Lead the Way

It was hardly an even rally, however. Wednesday's clear winners were again part of the "rotation trade."

A big drawdown in U.S. crude inventories sent oil prices 2.3% higher, helping Dow component Chevron (CVX (opens in new tab), +1.6%) and a host of other energy stocks (opens in new tab). But green energy stocks (opens in new tab) continued to soar, too – the stimulus bill (at least in its current form) will extend tens of millions of dollars' worth of tax credits to solar and wind firms.

Financial stocks, including JPMorgan Chase (JPM (opens in new tab), +2.8%) and Goldman Sachs (GS (opens in new tab), +2.5%), also shot upwarD. Even though the financial sector still faces a major headwind in the form of near-zero interest rates, Wall Street broadly likes its chances in 2021 given expectations for continued economic recovery and a shift into underloved value stocks (opens in new tab).

But the financial-sector equities catching the most attention heading into the new year might surprise you – there are a few banks, sure, but there are also less traditional plays such as lease-to-own financers and even data providers that are nonetheless vital to the sector. Read on as we highlight some of the best financial stocks to buy for 2021.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.