US stocks hit records as Senate passes infrastructure bill; China
tech stocks rebound


• US stocks were mostly higher as the Senate passed a US$1 trillion infrastructure plan that could represent the biggest burst of spending on US public works in decades. The Senate, which is split equally between Democrats and Republicans, voted 69-30 in favour of the bill, with one Republican abstaining. The passing of the bill is a huge victory for the Biden administration but it’s not the end of the story. The bill now faces a difficult path as it negotiates its way through the House of Representatives, which Democrats control by a slim margin. But with new coronavirus cases rising steadily in the United States, progress on the infrastructure package is expected to help gauge fiscal support for the next leg of recovery in the world’s largest economy.


• The Dow Jones Industrial Average finished up 0.46%, while the S&P 500 ticked 0.10% higher. Both set all-time high closing levels, although the S&P 500 exceeded its latest record — set just Friday — by less than a quarter of a point. The Nasdaq Composite lost 0.49% but was less than a percentage point below its all-time high.


• The US Dollar and Treasury yields rose ahead of tonight’s important US inflation data, amid comments from hawkish Federal Reserve policy committee members who believe that current levels of inflation could justify a step towards tightening the central bank’s ultra-loose policy. Investors will be listening out for clues as to how the Fed will be approaching the dialling back of its bond purchases based on the new data.


• In Asia, Hong Kong’s Hang Seng index rose 1.23% and the CSI 300 gained 1.16%, led by tech shares which recovered lost ground following recent losses. Tencent Holdings, Meituan and Alibaba Group were among the biggest contributors to the benchmark’s advance. A bounce-back in liquor makers also helped China’s main stock indices rebound from early falls on Tuesday. However, investors’ confidence towards Chinese equities remains fragile, and a resurgence of coronavirus infections could also weigh on investor sentiment. In Japan, the Nikkei Stock Average rose closed 0.24% higher, with gains led by pharmaceutical names.


• Oil recovered some ground after sliding more than 9% over the previous six trading sessions, with the global marker Brent crude rising to US$70.80 a barrel.


• Singapore’s Straits Times Index was up 0.95% as the city began easing Covid-19 restrictions for vaccinated persons.


• European stocks climbed to a seventh straight record high on earnings optimism. The Stoxx Europe 600 Index added 0.35% to its performance, with the travel and leisure sector leading the gains.


• For now, the virus seen as a manageable risk even as the Delta Covid-19 variant sweeps across various parts of the world. Closer to home, China reported more than 100 symptomatic cases yesterday. Reduced rate of fatalities suggest that vaccines are effective against the Delta variant.