U.S. equity markets rose Wednesday as details of President Biden’s $2 trillion infrastructure package were released on the final day of the first quarter.
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The Dow Jones Industrial Average gained 90 points, or 0.27%, while the S&P 500 and the Nasdaq Composite climbed 0.36% and 0.66%, respectively.
The Biden administration says its so-called American Jobs Plan will be a “once-in-a-century capital investment” in U.S. infrastructure that will create millions of good-paying jobs that positions America to “out-compete” China.
Bank of America notes the biggest beneficiaries will likely be industrial and material stocks.
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The $2 trillion plan will be entirely funded by Biden’s proposed Made in America Tax plan that would hike the corporate tax rate to 28%, up from 21%, and increase the minimum tax on multinational corporations to 21%. The increase in the corporate tax rate would partially undo former President Donald Trump’s tax cut which lowered the top corporate rate from 35%, among the highest in the world.
Biden will officially unveil the plan at a speech in Pittsburgh later on Wednesday.
BIDEN’S $2T INFRASTRUCTURE PLAN TO BE FUNDED BY CORPORATE TAX HIKE PROPOSAL
In stocks, Pfizer Inc. and BioNTech SE said their COVID-19 vaccine was safe and effective for children as young as 12 years old. A statement released by Pfizer CEO Albert Bourla said his company hopes doses can be given before the next school year.
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Swiss lender Credit Suisse had its credit outlook cut to negative at S&P Global Ratings due to its exposure to the unwinding of billions of dollars of positions by the hedge fund Archegos Capital Management.
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Boeing Co. and Alaska Airlines Group Inc. finalized an agreement in which the latter would buy an additional 23 737 MAX 9 jets that will be delivered between 2023 and 2024. The deal gives Alaska Airlines an option to purchase an additional 15 aircraft with deliveries occurring between 2023 and 2025.
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In earnings, Walgreens Boots Alliance Inc. reported its quarterly profit rose 8.4% from a year ago, helped by improved sales at its U.S. pharmacies. The company also raised its 2021 adjusted earnings per share forecast to mid-to-high single-digit growth.
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Meanwhile, steel manufacturer Cleveland-Cliffs Inc. outperformed after guiding both first-quarter and full-year adjusted EBITDA above estimates. The announcement also boosted rival U.S. Steel Corp.
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In commodities, West Texas Intermediate crude oil fell 43 cents to $60.12 per barrel and gold ticked up $1.30 to $1,687.30 an ounce.
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Overseas markets were lower across the board.
Britain's FTSE 100 paced the decline in Europe, trading down 0.33% while France's CAC 40 and Germany’s DAX 30 slid 0.27% and 0.21%, respectively.
In Asia, Japan’s Nikkei 225 lost 0.86%, Hong Kong’s Hang Seng index retreated 0.7% and China’s Shanghai Composite index slumped 0.43%.
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