​Stocks at Record Highs despite Capitol Chaos

WikiFX News (8 Jan.) - On Thursday (EST), all three US stock indices unexpectedly hit record highs following the Capitol chaos. As of Thursday's close, the Dow Jones Industrial Average rose 0.69%, the Nasdaq Composite added 2.56%, and the S&P 500 gained 1.48%.

Sitting through the night after the unrest, the US Congress on Jan.7 (local time) certified Biden's victory. Meanwhile, Mr. Trump issued a statement committing to an orderly transition of power, which reduces the country's political uncertainties.

“I think most feel this is more of a one-off situation, that this as an isolated event as opposed to some sort of bigger movement, and because of that we can look to the new government and to stimulus,” said Peter Tchir of Academy Securities.

Besides, Democrats have embraced a blue wave in Georgia, which means a Democratic control of both the White House and Congress. Markets were concerned that a Democratic-controlled Congress would pave the way for higher corporate taxes. However, some analysts believe a significant tax increase is not possible in the face of the extremely vulnerable economy. The Nasdaq saw green throughout the entire Thursday session.

The blue wave implies a likely larger fiscal stimulus, especially a package that joins the fight against coronavirus. US stocks are expected to see further gains amid the weakening haven-linked US dollar and the loosening monetary policies.

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Chart: Trends of Nasdaq Composite