S&P 500 Surpasses 4,700 Levels for First Time Backed by Infrastructure Stocks

UTC by Bhushan Akolkar · 3 min read
S&P 500 Surpasses 4,700 Levels for First Time Backed by Infrastructure Stocks
Photo: Depositphotos

As the US government passed the $1 trillion infrastructure bill, stocks from the materials and industrials sectors, likely to benefit the most, registered major gains on Monday.

The week started on Wall Street on a pretty mile note on Monday, November 8. However, the S&P 500 (INDEXSP: .INX) attained an important milestone crossing 4,700 levels for the very first time. This record high for the broader index comes amid the Congress approving the infrastructure bill that seriously boosted some stocks. 

On the other hand, other indexes like the Dow Jones (INDEXDJX: .DJI) and the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) also ended in the green. 

Last Friday, the US House of Representatives passed the $1 trillion infrastructure bill sending further the legislation to President Joe Biden for his approval. Back in August 2021, the Senate had already approved the package.

As it remains clear, the bill brings massive funding for new infrastructure projects like utilities, transportation, and broadband. Thus, stocks benefitting from the package, mostly industrial and materials, rallied on Monday. In a note to investors, Citi’s Anthony Pettinari said:

“Investors have waited for a significant step-up in infrastructure spending for decades. We view this generational investment as a significant catalyst for growth for a number of our stocks.”

The U.S. stock indices have continued with a strong rally this season amid the ongoing earnings season. More than 80% of the S&P 500 companies reported stronger than expected results for Q3 2021. Besides, the economic reopening and stronger demand have triggered a rally in the energy sector.

As said, the industrials and materials stocks rallied on Monday. The Global X US Infrastructure Development exchange-traded fund (ETF) touched an all-time high on Monday morning gaining nearly 1.3%.

Infrastructure Stocks among the Largest Gainers

Construction materials stock Vulcan, steel corporation Nucor, and mining company Freeport-MacMoRan were among the top gainers of the S&P500 on Monday. Other infrastructure-led gainers on Monday were United Rentals, Martin Marietta and Jacobs Engineering.

Similarly, construction equipment manufacturer Caterpillar registered 4% gains leading the Dow Jones rally. Deere, the heavy equipment manufacturer also saw its stock gaining 1.6% on Monday.

In the tech space, chipmaker Advanced Micro Devices (AMD) led the gains on Nasdaq Composite. The AMD stock rallied with a staggering 10.1% gain. The chipmaker announced that it has signed Meta (formerly Facebook) as its new customer for chip-related products.

However, Elon Musk‘s weekend poll was enough to rattle Tesla Inc (NASDAQ: TSLA) investors on Monday. Over the weekend, Elon Musk asked his Twitter followers whether if he should sell 10% of his TSLA stock holdings over the growing political clamor about taxing unrealized gains from equity holdings. With 58% of the respondents saying a “yes”, the TSLA stock tanked 5% on Monday.

Commenting on a broader market outlook, JPMorgan’s Marko Kolanovic said in a note: “We expect Equities to continue to climb the ‘wall of worry’, as risks look largely priced in and showing signs of improvement”.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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