New York (CNN Business)Stocks rallied to new all-time highs on Thursday, as Wall Street continues to be unfazed by the prior day’s violent clashes on Capitol Hill.
The S&P 500 (SPX), the broadest measure of the US equities market, finished up 1.5% while the Nasdaq Composite (COMP) closed 2.6% higher. The Dow (INDU) closed 0.7%, or 212 points, higher.All three indexes ended at new record highs. It was the first-ever Dow finish above 31,000 points and the Nasdaq closed above 13,000 points for the first time in history.For forward-looking investors, the Democratic sweep in the Senate, which gives the party control of the White House and Congress, was the most important news of the past few days. Control of all three branches of government gives the incoming Biden administration’s agenda an advantage, and it could mean swifter and more generous passing of additional stimulus to get the economy back on track.That news outweighed the shocking images of rioting Trump supporters storming the US Capitol building on Wall Street. The Dow on Wednesday climbed past 31,000 points for the first time in history and closed at an all-time high. Read MoreThe optimism on Wall Street isn’t a total surprise. Historically, US stocks have been unmoved by civil unrest as long as the turmoil has no tangible impact on earnings or economic growth.The market continued to reflect this optimism on Thursday, even as Corporate America was busy condemning the riots.But are stocks rising too fast for their own good?Goldman Sachs (GS) CEO David Solomon is concerned of “some excess in the market,” he told Axios in an interview. But others like Thomas Mathews, market economist at Capital Economics, aren’t as worried: “We still don’t think equity prices look too high relative to expected earnings,” he said in a note to clients.Interest rates remain low for now, which is good news for stocks because it means borrowing is cheap for companies and investors have few other compelling options.On top of that, the vaccine rollout and potential additional government stimulus will spark a strong recovery later in 2021, Mathews said. The economic data of the day came in better than expected as well, with lower-than-predicted jobless claims for last week, and a stronger-than-expected December services purchasing managers’ index.