Wednesday, May 27, 2020 – Stocks finished higher on Wednesday as economic reopenings continued to fuel hopes for a quick economic recovery. The S&P 500 climbed 1.5%, closing above the 3,000 point mark and its 200-day moving average for the first time since March. The benchmark index is now within 10.4% of its all-time high reached in February, and down just 6% year-to-date. The Dow jumped 553 points, surpassing the 25,000 level, while the small-cap Russell 2000 extended its recent rally, rising 3.1%. The Tech-heavy Nasdaq Composite reversed direction to add 0.8% after Micron Technology forecasted earnings above consensus expectations.
All 11 S&P 500 sectors closed in positive territory, with Financials and Industrials outperforming amid a perceived rotation into more cyclical and value-oriented groups. Retailers that were especially pressured during the coronavirus-inspired rout were also among the standouts. Meanwhile, Tech and Tech-related companies that benefited from the stay at home orders lagged, with Zoom Video Communications dipping 1.2%.
Reports of additional stimulus measures aided sentiment, with the Trump Administration reportedly considering proposals to provide unemployed Americans cash as an incentive to return to work. Meanwhile, the European Commission is finalizing an economic recovery fund worth an unprecedented 750 billion euros. In geopolitical news, U.S.-China tensions remained in focus, with Secretary of State Mike Pompeo stating that the U.S. had certified that Hong Kong has lost its political autonomy from China.
Treasuries were little changed, with the yield on the 10-year note steady at 0.68%. In commodities, WTI crude declined 4.5% to $32.81/barrel.
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