Tuesday’s Stock Market Open: US Equities Jump On Trump’s $1T Infrastructure Plan, Surge In May Retail Sales

Update: 12:05 p.m. EDT:

U.S. stocks have pared back gains from earlier in the session.

The Dow Jones Industrial Average gained 484.34 points to 26,247.50, while the S&P 500 rose 55.67 points to 3,122.26 and the Nasdaq Composite Index jumped 163.05 points to 9,889.08.

In Europe markets finished higher, as Britain’s FTSE-100 jumped 2.94%, while France’s CAC-40 gained 2.84% and Germany’s DAX surged 3.39%.

Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank will adjust its corporate bond buying program according to market conditions and that it would run through the bond market ’like an elephant.”

The National Association of Home Builders/Wells Fargo Housing Market Index, which measures homebuilder sentiment, surged 21 points in June to 58, the biggest monthly increase ever.

“As the nation reopens, housing is well-positioned to lead the economy forward,” said NAHB Chairman Dean Mon. “Inventory is tight, mortgage applications are increasing, interest rates are low and confidence is rising.”

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Original story:

U.S. stocks surged on Tuesday on reports that President Donald Trump is preparing a $1 trillion program to upgrade infrastructure in order to reinvigorate the economy, while retail sales soared in May.

The Dow Jones Industrial Average jumped 801.86 points to 26,565.02, while the S&P 500 rose 82.96 points to 3,149.55 and the Nasdaq Composite Index jumped 222.73 points to 9,948.76.

Bloomberg reported the Trump White House is planning a $1 trillion infrastructure proposal that will focus on roads and bridges, but also upgrade 5G wireless infrastructure and rural broadband.

U.S. retail sales surged by a record 17.7% in May, following a 14.7% plunge in April.

Trump cheered the data, tweeting: “Wow! May retail sales show biggest one-month increase of all time, up 17.7%. far bigger than projected. Looks like a big day for the stock market, and jobs!”

Geopolitical developments overseas were troubling.

South Korea confirmed that North Korea blew up an inter-Korean liaison office in the Gaesong Industrial Complex.

Three Indian soldiers were killed by Chinese forces during a violent confrontation along the disputed Himalayan border.

On Monday, investors welcomed an announcement by the Federal Reserve that it will buy individual corporate bonds.

“The size and the pace of Fed balance sheet expansion is something that will put a floor under global equity markets,” said Stephen Gallo, BMO Capital Markets head of European FX strategy.

“What appears to be new is the individual buying in the secondary market and what looks like, at least from the announcement, the potential for a wider variety of purchases,” wrote Dennis DeBusschere, strategist at Evercore ISI. “The reason credit spreads are tight is because investors believe that they would follow through on the program. If they didn’t follow through, credit spreads would move significantly wider and the Fed would have to purchase even more debt to shore up credibility.”

Overnight in Asia, markets finished higher. The Shanghai Composite gained 1.44%; Hong Kong’s Hang Seng jumped 2.39%; while Japan’s Nikkei-225 surged 4.88%.

In Europe markets traded higher, as Britain’s FTSE-100 jumped 3.59%, while France’s CAC-40 gained 3.49% and Germany’s DAX surged 3.82%.

Crude oil futures jumped 3.39% at $37.05 per barrel, Brent crude gained 3.12% at $39.74. Gold futures gained 0.05%.

The euro slipped 0.38% at $1.1281 while the pound sterling gained 0.25% at $1.2638.