One of the US’s two main stock indices hit an all-time high on Wednesday even as the coronavirus pandemic continued to weigh on the global economy.
The S&P 500 hit as high as 3,399.54 and was up around 0.25% when markets closed in Europe.
It came on a positive day for other markets, and the FTSE 100 closed up 0.6% to 6,111.98, a 35.36 point rise.
The S&P’s new record has prompted questions of whether investors have “taken leave of their senses”, said David Miller, investment director at Quilter Cheviot, an investment manager.
“There are two ways of looking at this. Either investors are behaving rationally or this is a bubble of irrationality,” he added.
“The government has pumped billions of dollars into the economy to help it through the crisis, but as authorities print the money, people and businesses are putting it in bank accounts, or into shares.
“Whether this is a temporary phenomenon or not is to be seen. However, for now excess cash is being invested in financial assets.
“I would argue that this is not a bubble that is about to burst. Investors are behaving rationally. Indices have been driven higher by successful companies. The US tech giants are leading the way out of the Covid crisis, generating extra revenue during the lockdown and reopening.”
One of those giants, Apple, became a little more giant on Wednesday, breaching a two trillion US dollar valuation in a first for an American company.
It comes less than two years since it became worth one trillion.
The Dax in Germany closed the day 0.7% higher and the Cac in Paris was up 0.8%.
A barrel of Brent Crude oil was worth 0.2% less just after markets closed in Europe, at 45.38 dollars.
The pound dropped 0.3% against the dollar to 1.3194, and 0.1% against the euro to 1.1087.
In company news, a day after Frasers Group revealed that its chairman had bought 4,000 shares in the company by mistake in the run up to its results on Thursday, investors threw their weight behind the firm.
Shares were up 8% by the end of the day, despite the mis-step, which experts say might turn heads at the regulator.
EasyJet shares were up 3.3% on Wednesday even as workers said they plan to protest outside the Southend, Stansted and Newcastle bases that the airline is set to close. The sites employ around 670 people.
The biggest risers on the FTSE 100 were IAG, up 14.2p to 201p, DS Smith, up 8.1p to 284.3p, Rolls-Royce, up 7.3p to 262.3p, Natwest, up 3.1p to 115.15p, and Glencore, up 4.1p to 176.12p.
The biggest fallers on the FTSE 100 were Persimmon, down 70p to 2,752p, Compass, down 28.5p to 1,149.5p, Barratt Developments, down 11.8p to 522.6p, Avast, down 10.5p to 536p, and Fresnillo, down 18.5p to 1,252.5p.