U.S. equities closed sharply higher on Wednesday as the Dow and S&P hit new record highs, while investors awaited a monetary policy announcement from the European Central Bank.
The S&P 500 erased earlier losses to gain around 1.3 percent, with telecoms rallying around 2.4 percent to lead advancers.
“This 2,219 level [on the S&P] was on where a lot of people were expecting to see some resistance, and we went through it like a hot knife through butter,” said JJ Kinahan, chief market strategist at TD Ameritrade, adding stocks were also boosted by some short covering. “A lot of people have been saying ‘this is the end’ and have ended up with very little money in their hands.”
The Dow Jones industrial average gained nearly 300 points, with Home Depot, IBM and Goldman Sachs contributing the most gains. The Dow Transports, meanwhile, hit their first intraday high since 2014 and closed at an all-time high. Since Nov. 8, transports have risen more than 12 percent.
“I think this is more momentum from the Trump rally,” said Adam Sarhan, CEO at 50 Park Investments. “You’ve got the financials, transports, steel stocks, small and mid-cap stocks all trading higher. The areas that have worked [since the election] continue to work.”
“While all this is happening, you’ve seen virtually no selling. That’s very good for stocks moving forward,” he said.
As of Wednesday’s close, the Dow has posted gains in 18 of the past 22 sessions and 12 record closes since the election. The S&P and the Nasdaq, meanwhile, have risen 4.8 percent and 3.9 percent since Nov. 8, respectively.
“We’ve obviously had a pretty significant run over the past few weeks, but with hardly any down days,” said Art Hogan, chief market strategist at Wunderlich Securities. “The market is trying to price in a paradigm of fiscal stimulus and deregulation.”
President-elect Donald Trump stunned the world by defeating former Secretary of State Hillary Clinton in the U.S. presidential election with optimism for greater infrastructure spending and deregulation of certain sectors propelling the sharp increase in stocks since Nov. 8.