U.S. stocks closed sharply higher on Wednesday as investors regained optimism that at least a partial deal on more U.S. fiscal stimulus may happen.
After abruptly calling off negotiations on a comprehensive bill on Tuesday, President Donald Trump later that day urged Congress to pass a series of smaller, standalone bills that would include a bailout package for the airline industry battered by the coronavirus pandemic. Airline shares jumped.
Indexes held gains after the Federal Reserve released minutes from its last policy meeting. The minutes showed U.S. central bankers, having agreed unanimously in August on a broad new approach to monetary policy, were divided in September over how to apply their new principles in practice.
“The only reason we were down yesterday was the tweet from President Trump, which he walked back last night. That’s why the market started off stronger and continued stronger. I think there’s full-blown expectations that some form of stimulus agreement is going to occur sooner than later,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Top White House officials downplayed the possibility of more coronavirus relief, while House Speaker Nancy Pelosi disparaged Trump for backing away from talks on a comprehensive deal.
Unofficially, the Dow Jones Industrial Average rose 529.45 points, or 1.91%, to 28,302.21, the S&P 500 gained 58.38 points, or 1.74%, to 3,419.33 and the Nasdaq Composite added 210.00 points, or 1.88%, to 11,364.60.
Eli Lilly and Co rose after saying it had submitted a request to the U.S. Food and Drug Administration for emergency use of its experimental COVID-19 antibody treatment.
With the presidential election just weeks away, focus later Wednesday may turn to a debate between Vice President Mike Pence and Democratic opponent Kamala Harris.
Reuters/Ipsos opinion polls released on Tuesday showed Democratic presidential candidate Joe Biden expanding his lead over Trump in battleground Michigan and the two candidates locked in a toss-up race in North Carolina ahead of the Nov. 3 election.
Investors also are preparing to hear soon from companies on the third quarter. Analysts expect earnings at S&P 500 companies to have dropped about 21% in the quarter from a year ago, according to IBES data from Refinitiv.