Does anyone have a gold medal ready for the Dow Jones Industrial Average? For the first time ever, the benchmark index crossed 30,000. So what led the Dow to cross 30k? And what else do investors need to know?
Importantly, there are three big reasons behind the move higher on Tuesday. But investors should also understand the broader context. Since early March, the stock market has been tied to the novel coronavirus. A steep selloff sent the major indices down fast. Since then, we have seen massive moves higher. It looks like Tuesday is the next step in this impressive leg up.
But what are the there reasons the Dow crossed 30k? Dive in with InvestorPlace below.
3 Reasons the Dow Crossed 30k
Reason No. 1: President Donald Trump launches the transition process.
After a tense presidential election and a delayed transition process, investors are likely cheering news that Trump will allow the transition of power to President-elect Joe Biden to begin. After tweeting that he has asked his team to cooperate, all sorts of Biden-backed equities are rallying. Just this morning, we reported on success in the renewable energy and cannabis sectors. Similarly, bitcoin (CCC:BTC) crossed $19,000 for the first time in three years. Many crypto bulls think a stimulus-happy Biden will drive more investors to bitcoin and its peers as a safe-haven asset.
Reason No. 2: Biden picks former Fed Chair Janet Yellen.
On a related note, investors have been closely watching who Biden picks to fill his cabinet. On Tuesday, we learned that former Federal Reserve Board Chair Janet Yellen will get the spot of Treasury Secretary. What does this mean? Well, many see her as a pragmatic and economy-focused pick. After watching Steven Mnuchin duke it out with Trump and Democrats, there is a sense that a politics-free Treasury would be good for the stock market.
Reason No. 3: Vaccines, vaccines, vaccines
What goes better with a smooth presidential transition than vaccine news? Maybe nothing. Investors are also celebrating positive novel coronavirus vaccine updates from Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX), Moderna (NASDAQ:MRNA) and AstraZeneca (NASDAQ:AZN). Importantly, each of these vaccine candidates is as much as 90% effective. This means that by the end of the year, the United States could begin mass vaccination.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.