On Monday, the US stock market demonstrated strong growth amid progress in agreeing on a bill by US President Joe Biden, providing for the allocation of $1.2 trillion for infrastructure. In particular, the benchmark S&P 500 is up about 14% YTD and hit a new record a week ago, as did the Nasdaq tech index. The S&P, in which the tech sector has a significant weight, gained 1.8% in June, but the average S&P share price declined. However, the index's gains were more pronounced in June as investors returned to large tech stocks. Recall that since the beginning of June, a bipartisan group of senators has been discussing an agreement on investments in US infrastructure. It is estimated that the package will cost about $974 billion over 5 years and about $1.2 trillion over 8 years. The project does not imply an increase in corporate taxes, however, it is likely that inflation-adjusted gas tax indexation will be proposed as one of the payment mechanisms for the plan. This infrastructure deal is now seen as more likely after Biden lifted his threat to veto the bill unless a separate Democratic spending plan is also passed by Congress.
