FX.co ★ Global stock markets ignored the storming of the Capitol in Washington

The United States and Asian stock exchanges reacted poorly to the unrest in the US Congress. The main stock indicators mostly increased, and the yield on 10-year US government bonds exceeded 1% for the first time since March last year. Vaccinations and the state aid package under the Democrats, who won the majority in both houses of Congress, remain the main concerns for market participants.

Recall that during the counting of votes on Capitol Hill in Washington, supporters of Donald Trump broke into the US Congress building. The clashes with law enforcement agencies resulted in the death of four civilians. The behavior of the protesters who broke into Congress was publicly condemned by many leaders of well-known American companies. Among them are JP Morgan Chase CEO James Dimon, Apple CEO Tim Cook, Microsoft President Brad Smith, and Alphabet CEO Sundar Pichai. In addition, the current US President Donald Trump and the elected Joe Biden called for the restoration of order to the protesters.

Despite this, major stock indexes mostly rose. The S&P 500 gained 0.57% and showed 3748.14 points. The Dow Jones jumped 1.44% to 30,829.4 points. Even banks and manufacturers affected by the COVID-19 pandemic showed positive dynamics. Even before the rally began, the Dow Jones industrial average crossed the 31,000-point mark for the first time in history. Meanwhile, the tech-heavy Nasdaq was down 0.61%. Analysts also noted negative dynamics in Apple (- 3.37%), Netflix (- 3.9%), Amazon (- 2.49%) and Microsoft (- 2.59%). The American manufacturer of electric cars Tesla, on the contrary, grew by 2.84%.

Investors outside the United States also ignored the unrest on Capitol Hill. So, the key indices in Australia, Japan, and South Korea increased by 1.8% -2.3%. Hong Kong and Shanghai lost slightly, sliding less than 0.5%.

The traditional safe-haven asset of investors – gold – decreased in value by 2.3%, which was the most serious fall in one day since the beginning of November.

On Thursday morning, futures linked to the main US indicators continued to rise at the level of 0.4% to 0.8%. A day earlier, the yield on 10-year US government bonds rose slightly to 1.047%, but this was enough to exceed the 1% mark for the first time since March 2020. Experts explain this state of affairs by the fact that the market expects a more impressive package of state support in the context of the coronavirus pandemic amid the Democrats gaining a majority in the US Senate. Now the Democratic Party has not only a majority in both houses of Congress but also the presidency, which will be occupied by Joe Biden.

Analysts believe that the markets mostly pay attention to positive factors today. Investors are trying to look beyond the spontaneous protests in Washington and potential tax changes that can be approved by Democrats in Congress. And if you look at the situation quite globally, the agenda of market participants now is on rapid vaccination of the population from COVID-19, the recovery of the global economy, and an increase in the state aid package.