Investors bet big on U.S. stocks Wednesday, giving the market its biggest single-day gain in nearly four months and pushing the major indexes to record highs.
The Dow Jones industrial average rose above 21,000 points for the first time in what was the biggest gain for the blue-chip index so far this year.
Banks were the biggest gainers amid heightened expectations that an improving economy will lead to higher interest rates. Energy stocks also notched big gains. Utilities and real estate stocks lagged. The dollar strengthened against the yen, euro and other major currencies. Bond prices fell as did the price of crude oil and gold.
Optimism over corporate tax cuts, deregulation and other business-friendly policy proposals reiterated by President Donald Trump during a speech before Congress helped fuel the rally. Growing speculation that the Federal Reserve may soon elect to raise interest rates again also helped traders buy.
"It's been what I would characterize as a bit of market euphoria on the back of the president's address to the joint session of Congress last night," said Bill Northey, chief investment officer of the Private Client Group at U.S. Bank.
The Dow jumped 303.31 points, or 1.5 percent, to 21,115.55. At one point, the 30-company average was up more than 356 points. The Dow hadn't been up more than 300 points in one day since November.
The Standard & Poor's 500 index gained 32.32 points, or 1.4 percent, to 2,395.96. That's the biggest single-day gain for the index, the benchmark favored by professional investors, since early November.
The Nasdaq composite index added 78.59 points, or 1.4 percent, to 5,904.03. Small-company stocks continued to outpace the rest of the market, a bullish economic sign. The Russell 2000 index rose 26.95 points, or 1.9 percent, to 1,413.64. All four indexes closed at new all-time highs. Each had set new highs last month.
Bond prices fell and yields rose after a key Federal Reserve official, New York Fed President William Dudley, said the case for raising interest rates had gotten stronger. The 10-year Treasury yield rose to 2.46 percent from 2.40 percent late Tuesday.
On Tuesday night, Trump struck a less confrontational tone than usual and steered away from dramatically negative descriptions of the U.S. economy. Trump also reaffirmed his pledges to reform taxes, slash red tape and ramp up spending on defense and infrastructure projects, though his remarks offered few new policy specifics.
The proposed reforms have helped send U.S. stock benchmarks to record highs in the weeks since the election in November.
Specialist Michael Urizzo, right, and trader Patrick Casey work on the floor of the New York Stock Exchange, Wednesday, March 1, 2017. Stocks opened strongly higher on Wall Street, led by big gains in banks as investors expected interest rates to rise. The early jump Wednesday put the Dow Jones industrial average above 21,000 points for the first time. (AP Photo/Richard Drew)
Trader Ryan Falvey, center, and specialist John O'Hara work on the floor of the New York Stock Exchange, Wednesday, March 1, 2017. Stocks opened strongly higher on Wall Street, led by big gains in banks as investors expected interest rates to rise. The early jump Wednesday put the Dow Jones industrial average above 21,000 points for the first time. (AP Photo/Richard Drew)
Trader Gordon Charlop, right, works on the floor of the New York Stock Exchange, Wednesday, March 1, 2017. Stocks opened strongly higher on Wall Street, led by big gains in banks as investors expected interest rates to rise. The early jump Wednesday put the Dow Jones industrial average above 21,000 points for the first time. (AP Photo/Richard Drew)
Trader Christopher Lotito, center, works on the floor of the New York Stock Exchange, Wednesday, March 1, 2017. Stocks opened strongly higher on Wall Street, led by big gains in banks as investors expected interest rates to rise. The early jump Wednesday put the Dow Jones industrial average above 21,000 points for the first time. (AP Photo/Richard Drew)
Jonathan Niles, left, and Jay Woods work on the floor of the New York Stock Exchange, Wednesday, March 1, 2017. Stocks opened strongly higher on Wall Street, led by big gains in banks as investors expected interest rates to rise. The early jump Wednesday put the Dow Jones industrial average above 21,000 points for the first time. (AP Photo/Richard Drew)
Trader Richard Cohen wears a "Dow 21,000" cap as he works on the floor of the New York Stock Exchange, Wednesday, March 1, 2017. Banks and other financial companies led U.S. stocks sharply higher, pushing the Dow Jones industrial average to close above 21,000 points for the first time. (AP Photo/Richard Drew)
Specialists Gregg Maloney, left, and Michael Pistillo work at their post near the close of trading on the floor of the New York Stock Exchange, Wednesday, March 1, 2017. Banks and other financial companies led U.S. stocks sharply higher, pushing the Dow Jones industrial average to close above 21,000 points for the first time. (AP Photo/Richard Drew)
A board above the trading floor of the New York Stock Exchange shows the Dow Jones industrial average closing number above 21,000, Wednesday, March 1, 2017. Banks and other financial companies led U.S. stocks sharply higher, pushing the Dow Jones industrial average to close above 21,000 points for the first time. (AP Photo/Richard Drew)
Donate to the newsroom now. The Salt Lake Tribune, Inc. is a 501(c)(3) public charity and contributions are tax deductible