The Dow Jones Industrial Average rose to an all-time high on Wednesday, with investors optimistic about the prospects of additional fiscal stimulus as results from the runoff elections in Georgia rolled in.
The 30-Dow climbed 437.80 points, or 1.4%, to end the day at 30,829.40, a record. The Dow briefly rose more than 600 points earlier in the session and hit an intraday all-time high. The S&P 500 advanced 0.6% to 3,748.14 and hit an intraday record. The tech-heavy Nasdaq Composite closed lower by 0.6%.
Stocks closed off their highs, and the CBOE Volatility Index, a gauge of investor fear, moved higher heading into the close, as protestors stormed the Capitol just after lawmakers met to count the Electoral College votes and declare Joe Biden the presidential election winner. Still, the Dow and S&P 500 closed solidly higher on the day and Treasurys, normally a safety trade, declined.
The 10-year Treasury note yield topped 1% for the first time since March. At market close, the benchmark rate was at 1.03%. Yields move inversely to prices.
Democrat Raphael Warnock was projected to win the Georgia U.S. Senate special election runoff against incumbent Republican Kelly Loeffler, according to NBC News. In the other Senate runoff election, Democrat Jon Ossoff was also projected to defeat Republican Sen. David Perdue, NBC said.
If both Democrats win, that would make a 50-50 tie in the upper chamber, with Vice President-elect Kamala Harris as the tiebreaker vote to give the party control of the Senate. This outcome could facilitate the passing of new coronavirus relief, raising hope for the country's economic recovery, some investors speculated.
"I think there's an expectation ... that there's going to be a lot more spending," Jason Trennert, chairman of Strategas, said on CNBC's "Squawk Box" on Wednesday. "If the Democrats were to pick up two seats, there's no question in my mind that later this year there would be a sense that more spending is needed."
Goldman Sachs expects another big stimulus package to the tune of $600 billion in the near term if Democrats prevail and take the Senate.
Certain stocks gained on expectations for additional government aid. The small-cap benchmark Russell 2000 jumped nearly 4%. Industrial giant Caterpillar surged 5.5%.
JPMorgan Chase and Bank of America shares rose 4.7% and 6.3%, respectively, amid the 10-year yield topping the 1% milestone as higher rates should help their bottom lines.
Tom Lee, head of research at Fundstrat Global Advisors, also pointed out the result brings clarity to the market outlook, which is a positive.
"I don't know the future, but to me, the 'uncertainty' of the election is arguably a bigger overhang than the actual outcome," Lee said in a note to clients.
Names that could be specifically helped by a Democrat agenda gained. The Invesco Solar ETF (TAN) rose 8.7%.
Tech stocks — the best-performing market group over the past year — lagged on Wednesday amid concerns over higher tax rates. The prospects of new stimulus also made tech stocks less attractive relative to beaten-down cyclical names. Facebook and Amazon both fell more than 2%, and Netflix dipped 3.9%.
Meanwhile, Vice President Mike Pence said he would reject President Donald Trump's calls to block Joe Biden's election confirmation.
"It is my considered judgement that my oath to support and defend the Constitution constrains me from claiming unilateral authority to determine which electoral votes should be counted and which should not," Pence said in a three-page letter addressed to "Dear Colleague."
Pence was later ushered out of the Senate as the Capitol went into lockdown, with rioters storming the complex. A Senate member later told NBC News that Pence and Sen. Charles Grassley had been taken to a secure location. The situation started after Trump encouraged thousands of supporters to march to the Capitol to protest the confirmation of Biden's victory.
"At this hour, our democracy is under unprecedented assault," Biden said in a nationally televised address, as the occupation of the federal legislative branch of government continued. "It's chaos, it borders on sedition and it must end now. I call this mob to pull back and allow this work of democracy to go forward."
—CNBC's Hannah Miao contributed to this report.
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