U.S. stocks are rallying to records Wednesday on encouraging earnings reports and continued optimism that new leadership in Washington will mean more support for the struggling economy.
The S&P 500 was 1.4% higher at 3,851 in afternoon trading, topping its record closing level of 3,824.68 set earlier this month. The Dow Jones Industrial Average was up 220 points, or 0.7%, at 31,151 as of 3:13 p.m. Eastern time, and the Nasdaq composite was 2.1% higher.
Joe Biden took the oath of office to become U.S. president, and he has a flurry of executive actions at the ready. He has also pitched a plan to pump $1.9 trillion more into the struggling economy, hoping to act quickly as his Democratic party takes control of the White House and both houses of Congress.
The hope on Wall Street is that such stimulus will help carry the economy until later this year, when more widespread COVID-19 vaccinations get daily life closer to normal. Such hopes have helped stocks and Treasury yields rise, even as the worsening pandemic digs a deeper hole for the economy. Spiraling coronavirus counts and deaths have more workers applying for unemployment benefits and shoppers feeling less confident.
“Most of Wall Street is assuming that the second half (of 2021) is when we will see pent-up demand start to show up in the economy, and that will push economic indicators higher and will likely cause a ramp up in earnings projections,” said Sam Stovall, chief investment strategist at CFRA.
The incoming Biden administration is taking control of the White House from Donald Trump, who pointed again on Wednesday to the stock market’s level as validation of his work.
Trump’s preferred measure is often the Dow Jones Industrial Average, even though the S&P 500 is much more important to most workers’ 401(k) accounts. Under Trump, the Dow had an a annualized return of 11.8% from his inauguration until his last day in office, according to Ryan Detrick, chief market strategist for LPL Financial. That’s better than any Republican president since Calvin Coolidge during the roaring 1920s, but it’s not as good as the returns for Bill Clinton or Barack Obama.
Trump has said in the past that he should get credit for the stock market’s gains following his election but before his inauguration. The market got a “Trump bump” then on anticipation of lower tax rates, less regulation on companies and faster economic growth. Much of that did come to fruition, but the COVID-19 pandemic and the government’s response to it upended everything in 2020.
Gains for stocks have also been accelerating since Biden’s election, before his inauguration, on enthusiasm about COVID-19 vaccines and hopes that he and Congress can deliver more stimulus for the economy. The bump for stocks between the most recent Election Day and Biden’s inauguration is bigger than Trump’s bump before his inauguration.
“The market is up more than 13% since Election Day,” Stovall said, noting that since World War II, the S&P 500 has risen an average of 3.5% in the first 100 days of a Democratic president’s administration, versus an average gain of 0.5% when a Republican was in the White House.
Janet Yellen, Biden’s nominee to be Treasury secretary, told the Senate Finance Committee during her confirmation hearing on Tuesday that the incoming administration would focus on winning quick passage of its $1.9 trillion plan.
“More must be done,” Yellen said. “Without further action, we risk a longer, more painful recession now — and long-term scarring of the economy later.”
A better-than-expected start to earnings reporting season is also helping to lift the market Wednesday. Analysts came in with low expectations, forecasting the big companies in the S&P 500 will report a fourth straight drop in earnings per share because of the damage from the pandemic. But the vast majority of the earliest reports have managed to top forecasts.
Analysts have been expressing concerns about pricey stock values heading into the latest round of corporate earnings, but they look more reasonable amid the backdrop of historically low interest rates, said Solita Marcelli, chief investment officer, Americas, at UBS Global Wealth Management. The low rates, along with new stimulus and the continued rollout of vaccines, will likely help bolster markets and the recovery.
“We think that global growth is going to continue to pick up,” she said.
Netflix jumped 17.9% for the S&P 500′s biggest gain after it said it ended last year with more than 200 million subscribers. It also said it made more in revenue during the end of 2020 than analysts expected, though its earnings fell short of forecasts. Business is good enough for the company that it says it likely doesn’t need to borrow anymore to cover its day-to-day operations.
Companies will need to meet the market’s expectations — including for a huge rebound in profit growth through 2021 — to validate the big runs for their stock prices during 2020, even as their profits plummeted. Stocks of several companies slipped on Wednesday, even though they reported stronger profits than expected. Procter & Gamble fell 1%, for example.
The yield on the 10-year Treasury rose to 1.09% from 1.07% late Tuesday.
A full-throated, supremely confident Lady Gaga belted out the national anthem at President Joe Biden’s inauguration in a very Gaga way — with flamboyance, fashion and passion.
The Grammy winner wore a large dove pin and an impressively billowing red sculpted skirt as she sang into a golden microphone, delivering an emotional and powerful rendition of “The Star-Spangled Banner.” She was followed at Wednesday’s ceremony by Jennifer Lopez, dressed all in white, with a moving medley of “This Land is Your Land” and “America the Beautiful,” throwing in a line in Spanish.
And country star Garth Brooks, doffing his black cowboy hat, sang a gospel-tinged, soulful a capella rendition of “Amazing Grace,” his eyes closed for much of the song. He asked the audience to sing a verse with him: “Not just the people here, but the people at home, to work as one united.” Leaving the podium, he donned his cowboy hat again, shook hands and hugged former President Barack Obama.
The three superstars were among a slew of glittery celebrities descending on Washington — virtually or in person — to welcome the new administration of Biden and Kamala Harris, a duo popular in Hollywood, where former President Donald Trump was decidedly not.
But Brooks was careful to call his decision to perform on Wednesday non-political, and in the spirit of unity. Brooks performed during the inaugural celebration of Obama in 2009, but turned down a chance to play for Trump in 2017, citing a scheduling conflict.
Other top-tier performers will be part of “Celebrating America,” a 90-minute, multi-network evening broadcast hosted by Tom Hanks that takes the place of the usual official inaugural balls. “Hamilton” creator Lin-Manuel Miranda will contribute a classical recitation, joining musicians like Bruce Springsteen, John Legend, Katy Perry, Demi Lovato, Foo Fighters, Justin Timberlake and Bon Jovi. Hosts Kerry Washington and Eva Longoria will be joined by basketball legend Kareem Abdul-Jabbar, chef Jose Andres, labor leader Dolores Huerta and Kim Ng, the first female general manager in MLB history.
The inaugural committee has made sure to blend this high-powered list with ordinary Americans and inspiring stories. Segments will include tributes to a UPS driver, a kindergarten teacher and Sandra Lindsay, the first in New York to receive the COVID-19 vaccine outside a clinical trial. The proceedings will be carried by ABC, CBS, CNN, NBC, MSNBC and PBS as well as the committee’s social media channels and streaming partners.
There’s also a virtual “Parade Across America” on inauguration afternoon, hosted by actor Tony Goldwyn with appearances by Jon Stewart, Earth Wind & Fire and the New Radicals — reuniting after more than two decades — among many others.
The history of celebrities performing at inaugurations dates back to Franklin D. Roosevelt’s third inauguration in 1941, when a gala celebration the evening before saw performances from Irving Berlin, Mickey Rooney and Charlie Chaplin, says Lina Mann of the White House Historical Association. “Chaplin performed his monologue from ‘The Great Dictator,’” Mann notes.
The celebrity component only increased over time, and one of the starriest inaugurations was that of John F. Kennedy in 1961. That celebration, hosted by Frank Sinatra, drew Harry Belafonte, Nat King Cole, Ella Fitzgerald, Gene Kelly, Ethel Merman, Laurence Olivier, Sidney Poitier and other celebrities.
Fast forward to the first Obama inauguration in 2009, where Aretha Franklin sang “My Country, ’Tis of Thee” at the swearing-in, and the new president and his wife, Michelle, were serenaded by Beyoncé singing “At Last” at an inaugural ball.
As newly inaugurated leaders often do, President Joe Biden began his tenure with a ritual call for American unity.
But standing on the same Capitol steps where just two weeks ago violent rioters laid siege to the nation’s democracy, Biden’s words felt less like rhetorical flourishes and more like an urgent appeal to stabilize a country reeling from a spiraling pandemic, economic uncertainty, racial tensions and a growing divide over truth versus lies.
“We must end this uncivil war,” Biden declared shortly after being sworn in as the nation’s 46th president.
Repairing the badly battered nation amounts to one of the greatest challenges to face an American president. The coronavirus pandemic has killed more than 400,000 Americans and is still raging out of control. The economy keeps shedding jobs, with unemployment hitting women and minorities the hardest. And the insurrection at the Capitol made clear the extent of the risks posed by the nation’s deep political divisions and the embrace of conspiracies and lies by many followers of Biden’s predecessor, former President Donald Trump.
“Few people in our nation’s history have been more challenged or found a time more challenging or difficult than the time we are in now,” Biden said.
Indeed, Biden, 78, is taking office at as grim a moment as many Americans can remember, and his inaugural celebration reflected that reality. There was no cheering crowd spread out before him on the National Mall when he took the oath of office as a consequence of the pandemic, but there were 25,000 National Guard troops securing the streets of Washington in response to the Capitol attack. Officials who did gather there wore face masks and were seated at a distance.
Trump wasn’t on hand to witness the fallout of his tenure, having defied tradition and left Washington earlier Wednesday morning.
Historians have put the challenges Biden faces on par with, or even beyond, what confronted Abraham Lincoln when he was inaugurated in 1861 to lead a nation splintering into civil war or Franklin Delano Roosevelt as he was sworn in during the depths of the Great Depression in 1933.
But Lincoln and Roosevelt’s presidencies are also a blueprint for the ways American leaders have turned crises into opportunities, pulling people past the partisan divisions or ideological forces that can halt progress.
“Crises present unique opportunities for large scale change in a way that an average moment might not,” said Lindsay Chervinsky, a presidential historian and author of “The Cabinet: George Washington and the Creation of an American Institution.” “The more intense the crisis, the more likely the country is to get behind someone to try to fix that — the concept of uniting in war or uniting against a common threat.”
But by some measures, Roosevelt and Lincoln had advantages Biden does not. Roosevelt’s Democratic Party had solid majorities in Congress, helping him power through his expansive agenda. Lincoln’s Republican majorities were added by the secessionist push that dwindled his opponents’ ranks in Congress.
Biden, meanwhile, will have the narrowest of Democratic majorities in Congress; in the 50-50 Senate, it will fall to Vice President Kamala Harris to break any ties. The Republican Party faces an existential crisis of its own making after the Trump era, and it is deeply uncertain how much cooperating with the new Democratic president fits into its leaders’ plans for their future.
Still, Biden has signaled he will press Congress aggressively in his opening weeks, challenging lawmakers to pass a $1.9 trillion pandemic relief package to address the public health and economic crisis — all but daring Republicans to block him at a moment when cases and deaths across the U.S. are soaring.
Biden’s ability to get that legislation passed will significantly shape both his administration’s ability to tackle the pandemic and his overall standing in Washington. He’s staked much of the promise of his presidency on his ability to court lawmakers from across the aisle, touting his long working relationship with Republican senators and the reputation he cultivated as a dealmaker while serving as President Barack Obama’s No. 2.
But Washington has changed rapidly since then, a reality Biden’s advisers insist he is clear-eyed about. Unlike Obama, he will quickly flex his executive powers on his first day in office, both to roll back Trump administration policies and to take action on the pandemic, including issuing a mask mandate on federal property. He’s also pledged that his administration will vaccinate 100 million people against the coronavirus within his first 100 days in office, laying down a clear marker to judge his success or failure.
Laura Belmonte, the dean of the Virginia Tech College of Liberal Arts and Human Sciences and a professor of history, said that while Biden would be “naive” to think Washington is the same as it was when he was a senator or even when he left it as vice president, the experience he brings to the job will be invaluable in this moment.
“We don’t have time for a learning curve,” Belmonte said. “I cannot think of a modern president that has faced a more daunting landscape.”
As he addressed the nation on Wednesday, Biden was plainspoken about the challenges ahead and the reality that his presidency will be judged on his ability to overcome them. He also nodded to some of the reasons for optimism on the horizon, including the rollout of COVID-19 vaccines and an economy poised to rebound when the pandemic ultimately passes.
But there is far less certainty about the ultimate challenge the new president faces: bridging the deep ideological, racial and factual divides that have pushed the nation to the brink.
“Unity is the path forward,” he said. “We must meet this moment as the United States of America. If we do that, I guarantee you we will not fail.”
Washington couldn’t turn the page quickly enough from Donald Trump to President Joe Biden.
Trump’s voice faded from the capital he had animated and antagonized since 2017 as he flew to private life in Florida, with his last trip on Air Force One tuned in to Biden’s inauguration on television.
And quite suddenly, at least for the moment, the old ways were back: reverence of custom, rituals dating back two centuries, scenes of grace, calls for unity.
Four years after Trump’s dark portrayal of “American carnage,” Biden set out his intent on the same platform of the flag-bedecked Capitol to write “an American story of hope.”
The ascension of the 46th president came with poetry, trumpets, Lady Gaga singing the national anthem, Garth Brooks singing “Amazing Grace” and keen memories of the insurrection on these grounds by Trump supporters only two weeks earlier.
“Democracy has prevailed,” Biden said in his sober remarks, adding, “We must end this uncivil war.”
“Modest, austere, grave, calming, cleansing, inspiring,” historian Michael Beschloss said of Biden’s speech.
The bigger names may well have been upstaged by 22-year-old Amanda Gorman, whose poem spoke of a country “Where a skinny Black girl, descended from slaves and raised by a single mother, can dream of becoming president, only to find herself reciting for one.” Trump didn’t summon a poet for his inauguration in 2017; not all presidents do.
Biden emerged from Blair House, the president’s official guesthouse, to open his day just as Trump vanished inside the big plane at Joint Base Andrews, as if their footsteps had been choreographed. But the outgoing president was not one to coordinate anything with the incoming one.
Trump never conceded the election, declined to attend the inauguration and upended the tradition of sending a government plane to bring the president-elect to Washington. Nor did he invite the Bidens to the White House for morning coffee and tea, as the Obamas had done for the Trumps in 2017.
Biden opened his presidency acknowledging former presidents on the platform, Republican and Democrat, and Trump’s vice president, Mike Pence, who attended the ceremony and acknowledged Biden’s victory in ways Trump never did. Biden did not offer a personal acknowledgment of the man he defeated, nor did Trump mention him.
Under threat of conviction from the Senate on an accusation of inciting insurrection, Trump departed with a perfunctory nod to those who have died from the coronavirus, an obligatory wish of “luck” to the next administration without mentioning Biden’s name, a premature claim on any success Biden might have reviving the economy, and the cloudy threat of a return.
“Have a nice life,” Trump said in remarks to well-wishers upon his departure. As Air Force One flew low along the coast, Biden’s inauguration played on Fox News on television aboard the flight. Trump’s family was on board. He spent some of the flight with flight staff who went up to him to say goodbye.
Rituals of the republic went on without him, though in a way never before seen. Washington got on with things, this time with masks on everyone (except Brooks), people taking care to distance from each other and some 25,000 National Guard troops deployed to keep the peace.
In a striking tableau at the Capitol, three former presidents and first ladies of different parties mingled as though at a cocktail party. And again, in hushed moments at Arlington National Cemetery, where Biden and Harris led a wreath ceremony at the Tomb of the Unknown Soldier while Barack Obama, George W. Bush, Bill Clinton and spouses watched.
It was among the inaugural events where a new president and his successor normally come together but Trump had decided to skip the day’s proceedings and Biden had said that was fine with him.
The inauguration crowds were sparse by design, with invitation-only guests at the immediate scene and 200,000 small flags standing in place of however many citizens who would have come if the capital’s core hadn’t been under military lock and key and if no pandemic had been sweeping the country.
Yet Raelyn Maxwell of Park City, Utah, came with an American flag, a poster board sign reading “Dear Women of Color, thank you” and a bouquet of roses she hoped to toss to Kamala Harris if she could somehow get close enough to the new vice president.
“I protested 45’s inauguration,” she said of Trump, the 45th president, “and I wanted to be here when he left. “And I wanted to celebrate the new president.” She also carried Champagne to toast the occasion with friends here from France.
Biden, the second Roman Catholic president, attended a morning mass at St. Matthews Church with at least three Baptists — Harris and Republican leaders Mitch McConnell from the Senate and Kevin McCarthy from the House — and the Senate Democratic leader Chuck Schumer, who is Jewish.
It was one of those bipartisan, not to mention multi-faith, events that Washington is known for, coexisting with searing political division.
St. Matthew, patron saint of civil servants, was a tax-collector and, on the brighter side, an apostle who spread the gospel exhorting people to “Love your enemies, bless them that curse you, do good to them that hate you,” according to the church’s teachings.
There were stirrings of that Wednesday.
In one of his first official acts, President Joe Biden planned Wednesday to return the United States to the worldwide fight to slow global warming and to launch a series of climate-friendly efforts that could transform how Americans drive and get their power.
“A cry for survival comes from the planet itself,” Biden said in his inaugural address. “A cry that can’t be any more desperate or any more clear now.”
Biden was to sign an executive order rejoining the Paris climate accord within hours of taking the oath of office, fulfilling a campaign pledge. The move undoes the US withdrawal ordered by predecessor Donald Trump, who belittled the science behind climate efforts, loosened regulations on heat-trapping oil, gas and coal emissions, and spurred oil and gas leasing in pristine Arctic tundra and other wilderness.
The Paris accord commits 195 countries and other signatories to come up with a goal to reduce carbon pollution and monitor and report their fossil fuel emissions. The United States is the world’s No. 2 carbon emitter after China.
Biden's move will solidify political will globally, former UN Secretary-General Ban Ki-moon said Wednesday.
“Not a single country in this world, however powerful, however resourceful one may be, can do it alone,” said Ban, speaking at a briefing in the Netherlands for an upcoming Climate Adaptation Summit. “We have to put all our hands on the deck. That is the lesson, very difficult lesson, which we have learned during last year," as Trump made good on his pledge to pull out of the global accord.
Biden also will use executive orders to start undoing other Trump climate rollbacks. He will order a temporary moratorium on new oil and gas leasing in what had been virgin Arctic wilderness, direct federal agencies to start looking at tougher mileage standards and other emission limits again, and revoke Trump's approval for the Keystone XL oil and gas pipeline.
Another first-day order directs agencies to consider the impact on climate, disadvantaged communities, and on future generations from any regulatory action that affects fossil fuel emissions, a new requirement. Human-caused climate change has been linked to worsening natural disasters, including wildfires, droughts, flooding and hurricanes.
However, there was no immediate word on when Biden would make good on another climate campaign pledge, one banning new oil and gas leasing on federal land.
After Biden notifies the UN by letter of his intention to rejoin the Paris accord, it would become effective in 30 days, UN spokesman Alex Saier said.
Rejoining the Paris accords could put the US on track to cutting carbon dioxide emissions by 40% to 50% by 2030, experts said.
“There’s a lot we can do because we’ve left so much on the table over the last four years," said Kate Larsen, former deputy director of the White House Council on Environmental Quality under the Obama administration.
Biden has promised that the needed transformations of the US transportation and power sectors, and other changes, will mean millions of jobs.
Opponents of the climate accord, including Republican lawmakers who supported Trump's withdrawal from it, have said it would mean higher gas prices and higher electricity prices — even though wind and solar have become more affordable than coal, and competitive with natural gas, in generating electricity.
“The Paris climate agreement is based on the backward idea that the United States is a culprit here, when in reality the United States is the leading driver of climate solutions,” said Sen. John Barrasso, a Wyoming Republican.
Republican senators are expected to introduce legislation that would require Biden to submit the Paris plan to the Senate for ratification. It’s not clear whether the narrowly divided Senate would have the two-thirds votes needed to ratify the agreement, which was never approved by Congress.
Supporters say congressional approval is not needed. Most of the pollution-reduction goals set by the agreement are voluntary.
The climate deal is based on each nation setting a goal for cutting carbon pollution by 2030. Other countries submitted theirs by last month. The USdid not. Saier said America just needs to submit its goal some time before November climate talks in Glasgow, Scotland.
A longtime international goal, included in the Paris accord with an even more stringent target, is to keep warming below 2 degrees Celsius (3.6 degrees Fahrenheit) since pre-industrial times. The world has already warmed 1.2 degrees (2.2 degrees Celsius) since that time.
As of 2020, US emissions were 24% below 2005 levels, but that reflected the extraordinary economic slowdown stemming from the coronavirus pandemic, said climate scientist Zeke Hausfather, energy and climate director for the Breakthrough Institute.
There are two big areas where climate policy deals with day-to-day American life. One is electricity generation, and the other is transportation.
There’s been a quiet transformation, because of market forces that have made wind and solar cheaper than dirtier coal, toward cleaner fuels, and that’s expected to continue so that eventually nearly all of the nation’s power will be low or zero carbon, Larsen and other experts say.
What happens to cars, trucks and buses will be far more noticeable. Several experts foresee the majority of new cars purchased in 2030 being electric.