The Standard and Poor’s (S&P) 500 rose to another record high during the second quarter of 2021 as risk assets generally maintained their upward momentum. A combination of positive factors, led by significant progress in the reopening of society in a post-lockdown environment stimulated economic growth and support for global equities.
The pace of vaccinations in the US accelerated meaningfully in the second quarter, with daily vaccinations hitting a peak of more than three million per day by the middle of April. The increased pace of vaccinations combined with a decline in Covid-19 cases helped numerous states more fully reopen their economies or elicited their intentions to do so. That signaled to investors that a return to pre-pandemic normal was now likely just a matter of time.
Additionally, monetary support from the Federal Reserve (Fed) in the form of persistently low interest rates and bond purchasing activities continues to provide a favorable backdrop in which the economic recovery can maintain itself. Alongside these efforts, Congress has been providing significant fiscal support in form of government spending directly to businesses and individuals. The impact of these stimulative payments, totaling about $5 trillion, has been consequential.