The case for such stimulus has been rising by the day. Dismal reports have piled up showing how the worsening pandemic has more workers applying for jobless benefits and shoppers feeling less confident.
Tuesday’s Senate Finance Committee hearing with Yellen is one of several that the Senate will be holding as the incoming Biden administration tries to get its top Cabinet officials in office quickly. Biden is set to take the oath of office on Wednesday, ending President Donald Trump’s four-year term.
Besides stocks, the optimism about an eventual acceleration for the economy and another round of stimulus have also helped push Treasury yields up sharply recently.
The yield on the 10-year Treasury climbed back to 1.11% from 1.08% late Friday. It’s been rising sharply this month on a combination of expectations for more U.S. government borrowing, stronger economic growth and higher inflation.
Higher rates could eventually add pressure on stocks, underscoring more how expensive stocks have become relative to the profits that companies are producing.
But some areas of the stock market could benefit, including banks. Higher rates and a healthier economy would allow them to earn bigger profits from making loans.
Bank of America was flipping between small losses and gains in morning trading after reporting a weaker profit for the last three months of 2020 than a year earlier, but still above analysts’ expectations. The bank also said expectations for a healing economy mean it doesn’t need to hold onto as much in reserves to cover for potentially bad loans.
Goldman Sachs, State Street and Halliburton also reported stronger results for the end of 2020 than analysts expected as earnings reporting season picks up pace. Wall Street is expecting a relatively weak showing this time around, with another sharp drop in earnings per share. But analysts expect growth to rebound powerfully through 2021.
General Motors jumped 8.4% for one of the biggest gains in the S&P 500 after it said it will work with Microsoft and self-driving car company Cruise to develop autonomous, all-electric vehicles. GM, Microsoft, Honda and other investors will also pump $2 billion into Cruise, valuing it at $30 billion.
Microsoft added 0.3%.
In Europe, Germany’s DAX returned 0.1%, and France’s CAC 40 slipped 0.1%. The FTSE 100 in London dipped 0.1%.
In Asian markets, Hong Kong’s Hang Seng gained rose 2.7%, the Nikkei 225 in Tokyo gained 1.4% and South Korea’s Kospi jumped 2.6%. Stocks in Shanghai slipped 0.8%.
On Monday, trading got off to a slow start for the week around the world with U.S. markets closed in observance of Martin Luther King Day.