The Dow Jones Industrial Average surged into record territory Wednesday, as more dovish language from the Federal Reserve and good news on the COVID front drove an unambiguously positive tone on Wall Street.
In testimony before Congress, Fed Chair Jerome Powell said the central bank's focus remained on economic recovery, and isn't in a rush to let interest rates rise.
"Any of the market's (we think unjustified) fear of a taper tantrum are not within eyesight," says Rick Rieder, BlackRock's chief investment officer of Global Fixed Income, "as today's communication was clear that it is not time to communicate any change."
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Also on Wednesday, the Food and Drug Administration said that Johnson & Johnson's (JNJ, +1.3%) COVID-19 vaccine was both safe and effective. So-called "recovery" plays screamed ahead: Royal Caribbean (RCL, +7.3%) hit one-year highs, while energy stocks such as Chevron (CVX, +3.7%) and Exxon Mobil (XOM, +3.0%) continued to rally.
The Dow, up 1.4% to a new high of 31,961, was led by Boeing (BA, +8.1%), which rebounded amid reports that recent issues with its 777 models involved Pratt & Whitney engines, not Boeing engineering. The aircraft maker also forecast strong Latin American demand.
Other action in the stock market today:
- The S&P 500 improved by 1.1% to 3,925, putting it within mere points of its all-time highs.
- The Nasdaq Composite closed 1.0% higher to 13,597.
- The small-cap Russell 2000 rebounded violently, jumping 2.4% to 2,284.
- GameStop (GME, +103.9%) shares were briefly halted after more than doubling by late afternoon in a quick surge on seemingly no news.
- Tesla (TSLA, +6.2%) shares rebounded from yesterday’s selloff, in part on data showing Ark Invest CEO and portfolio manager Cathie Wood’s funds bought more shares on the dip.
- U.S. crude oil futures rocketed 2.6% higher to $63.26 per barrel, a 13-week high.
- Gold futures dipped 0.4% to $1,797.90 per ounce.
- Bitcoin prices, at $47,140 on Tuesday, finished 3.3% higher to $48,712. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Sit Back and Relax With the Pros
For many stock investors, Wednesday was a "mental health" day of sorts – no massive swings, just a nice, gentle updraft throughout the day.
It's the kind of calm more routinely enjoyed by investors who primarily "set it and forget it" with a portfolio of diversified funds.
That feeling is all the more enhanced when you're relying on skilled, seasoned managers to make the tough decisions – a trait shared by a pair of T. Rowe Price mutual funds (one equity, one bond) that have earned independent research firm CFRA's top five-star ratings. (Note: If you're a 401(k) investor, it's possible that your plan doesn't offer these options; that's OK, we've got your back with these widely available T. Rowe products.)
But whether it's T. Rowe Price, Vanguard, or even smaller, more specialized shops, adept active management can help you invest confidently and with a cooler head, regardless of the market's ups and downs. If you're curious about the best such funds the market has to offer, check out our latest iteration of the Kiplinger 25 – a list of our favorite low-cost, actively managed mutual funds.
Kyle Woodley was long BA and Bitcoin as of this writing.
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