Stocks surged on Wednesday after Sen. Bernie Sanders dropped out of the presidential race, relieving some of Wall Street’s political concerns.
- The Dow Jones Industrial Average gained 600 points or 2.7%.
- The S&P 500 climbed 2.5%.
- The Nasdaq Composite increased by 2.1%.
Here’s why. Some of Sanders’ policy proposals, including Medicare for All, raised concern among several business owners, and investors who feared taxes would go up under his presidency.
Wednesday’s news puts former Vice President Joe Biden — who is seen by Wall Street as a more market-friendly candidate — closer to the Democratic nomination.
“Biden’s policies will get new scrutiny now that he is the presumptive nominee, but the truth of the matter is that the market will be looking towards Washington more to help the economy, and much of the assistance match Biden’s platform,” said Ed Mills, Washington policy strategist at Raymond James.
Basically, the US is once again asking for the Government’s financial support.