Last week, risk assets generally trended sideways as investors watched for progress on the COVID-19 vaccine roll-out and a new fiscal stimulus bill. The S&P 500, a broad basket of large US companies, has advanced more than 4% so far in 2021.

US equity indices advanced last week, with the S&P 500 ending at a new all-time closing high. The increase is likely attributable to a combination of positive events, such as progress toward additional government stimulus, continued roll-out of COVID-19 vaccines, and better-than-expected fourth quarter results from S&P 500 companies.

US stocks rose last week after declining in January. With the week’s gain of nearly 4.7 percent, the S&P 500 index is now positive for the year by 3.6 percent.

US stocks, as measured by the S&P 500 index, rose nearly two percent last week as investors remained optimistic regarding the prospects for an end of the COVID-19 pandemic in 2021 and a sustained economic recovery. This week will have no shortage of potentially market-moving events.

This week, Joe Biden will be sworn in as the 46th President of the United States. Based upon the list of priorities communicated so far, the administration appears focused on ramping up vaccine distribution and economic relief in his first few days in office.

The S&P 500, a broad measure of large publicly-traded US companies, advanced to another all-time high last week as the Democratic Party gained control of the Senate via the run-off elections in Georgia. The Democrats will control both houses of Congress when President-elect Biden is sworn in, which makes the prospect of significant additional fiscal stimulus more likely, both in the form of direct cash payments to Americans as well as infrastructure spending.

US stocks, as measured by the S&P 500 index, declined approximately 1% last week as hospitalizations and deaths in the US from the COVID-19 pandemic reached daily records (Chart 1). Despite these grim milestones, US equities continue to trade near all-time highs as investors anticipate an end to the pandemic in the coming months as vaccines are broadly distributed across the nation and the world.