After weeks of arguing and deliberating, the House finally passed the $1 trillion bipartisan infrastructure bill that has been the talk of Capitol Hill all season. A “once in a generation” achievement, this spending package marks a historic investment in infrastructure. Indeed, it means $550 billion headed toward transportation, broadband and utilities. Although the bill garnered approval from the U.S. Senate in August, it did not receive approval from the House of Representatives until the evening of Friday, Nov. 5, passing with a vote of 228 to 206. Its passing means good news for many Americans and certainly for investors whose portfolios include infrastructure stocks.
What’s Happening With Infrastructure Stocks
A central focus of the bill was that it would put federal funding toward much needed infrastructure repairs and development while creating jobs for working Americans. It hasn’t put anyone back to work yet, but stocks across many sectors are rising today as optimism spreads. The sectors that stand to benefit the most from the bill — construction and equipment manufacturing — are having a great day so far. Infrastructure stocks are rising in anticipation of a bright future.
Manufacturer Caterpillar (NYSE:CAT) is up almost 4% as of this writing. Some of its competitors are seeing even more impressive gains. United States Steel Corporation (NYSE:X) is up more than 7%. Additionally, electric vehicle (EV) infrastructure builder Chargepoint Holdings (NYSE:CHPT) is up 11%, all within the first hour of trading. All three companies are coming off a very good month. CAT rose by 5.5% in October, while CHPT and X are up 34% and 26%, respectively.
Why It Matters
While there was never much question that this bill would pass, there was speculation regarding what would be included in it when it finally arrived at President Joe Biden’s desk. It’s easy to see why this type of deliberation and uncertainty could have presented some concerns for investors. After all, Wall Street certainly hates uncertainty. It was always a fairly safe assumption, though, that any sort of legislature meant to address infrastructure would provide a significant boon to certain infrastructure-related companies.
The bill includes $7.5 billion designated for EV charging stations, indicating that Capitol Hill is recognizing the important role that they will play in the future of transportation. It’s certainly not surprising that an EV charging company like Chargepoint would be surging upon the news. It’s also a highly positive development for the EV-producing sector, as it should serve to eliminate doubt for anyone who still questions that the future of transportation is electric. Unsurprisingly, popular EV stocks are rising today, including Lucid Motors (NASDAQ:LCID) and Nio (NYSE:NIO).
What It Means
This massive investment from Capitol Hill indicates its focus on building a more sustainable future. More than anything, it highlights that the United States is moving in a direction toward clean energy and green technology. While the passing of this bill will help America repair and develop key areas, it will also help it move toward a greener future. This points toward a positive long-term market outlook. And it’s not just positive for infrastructure stocks but for all companies involved in green energy and technology.
These stocks are up today for a reason. And they will likely enjoy a positive year of trading as the U.S. begins doling out the funds outlined in the bill throughout the year ahead. There may not be a green New Deal just yet, but for infrastructure stocks, that will certainly be the color of the future.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
