The Dow Jones industrial average rose above 30,000 points for the first time Tuesday as Pennsylvania certified President-elect Joe Biden's win in that state and investors cheered the White House's moves to pave the way for Donald Trump's exit from the Oval Office.
Top strategists at investment house UBS in a note to clients on Tuesday morning said uncertainty over the contested presidential election had been one of the main factors holding the market back. The removal of that uncertainty, along with news reports that former Federal Reserve Chair Janet Yellen could be picked as Mr. Biden's Treasury Secretary, appeared to have been what boosted the highly watched index to a new high, the UBS note said.
The UBS strategists predicted "the incoming administration to hit the ground running on addressing issues such as the COVID-19 pandemic," and that the transition of power added to investors positive outlook for the stock market.
The Dow basket of 30 blue-chip stocks rose nearly 500 points, or 1.6%, to trade just over 30,000 at midday Tuesday. The broader S&P 500-stock index rose 1.5%. The tech-heavy Nasdaq composite lagged the rest of the market, but the popular index that's home to giants like Apple, Microsoft, Amazon, Facebook, Tesla and Google parent Alphabet was still up over 1%.
The gains extend a monthlong market rally driven by growing optimism that development of coronavirus vaccines and treatments will loosen the pandemic's stranglehold on the economy. They also mark a rapid climb for the Dow from its March 23 low of just under 18,600 during the worst of its early pandemic nosedive.
Traders are favoring stocks that stand to gain the most from a gradual reopening of the economy, such as banks and industrial companies. Overseas markets also rose. Treasury yields and oil prices were headed higher.
On Monday, the head of the federal General Services Administration acknowledged that Mr. Biden was the apparent winner of this month's presidential election. That allows the incoming president to coordinate with federal agencies on plans for taking over on January 20, despite ongoing efforts by President Donald Trump to overturn the election.
Also on Monday, drugmaker AstraZeneca reported good results from ongoing vaccine studies. It said its potential vaccine, which is being developed with Oxford University, was up to 90% effective. Unlike rival candidates, AstraZeneca's doesn't have to be stored at ultra-cold temperatures, making it easier to distribute to hundreds of millions of people.
Last week, Pfizer and Moderna both reported study results showing their vaccines were almost 95% effective. And, over the weekend, Regeneron Pharmaceuticals received U.S. government approval for emergency use of its COVID-19 treatment. The drug, which Mr. Trump received when he was sickened by COVID-19 last month, is meant to try to prevent hospitalizations in patients with mild-to-moderate symptoms.
Trading is expected to be light on Wall Street this week ahead of the Thanksgiving holiday on Thursday, when U.S. stock markets will be closed. They will reopen on Friday for a half-day session.
European markets were broadly higher, and Asian markets closed mixed.