US infrastructure deal, inflation data push global markets higher

Getting bipartisan agreement on the infrastructure deal required Biden to sacrifice some of his ambitions; oil prices headed toward a fifth consecutive weekly gain

WASHINGTON

Global stock markets moved higher on Friday after Thursday’s breakthrough in Washington talks to secure a bipartisan infrastructure deal, while oil prices headed toward a fifth consecutive weekly gain on hopes for demand growth.

Investors have been looking to an infrastructure agreement to extend the US recovery after massive fiscal stimulus helped the economy grow at a 6.4% annualised rate in the first quarter. The plan is valued at $1.2 trillion over eight years, of which $579 billion is new spending.

Getting bipartisan agreement on the infrastructure deal required President Joe Biden to sacrifice some of his ambitions on schools, climate change mitigation and support for parents and caregivers, as well as tax increases on the rich and corporations.

Sebastien Galy, senior macro strategist at Nordea Asset Management, said the deal was “likely big enough for the economy without overheating it unnecessarily,” adding in a note that it meant “growth expectations improve somewhat.”

The S&P 500 index hit a record high on Friday, boosted by gains in Nike and bank stocks, while weaker-than-expected inflation data eased worries about a sudden tapering in stimulus by the Federal Reserve.