Biden’s $1tn Infrastructure Deal Rejected, Talks Continue

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Key Takeaways

• Infrastructure bill blocked by Senate Republicans, Joe Biden remains confident the vote will pass
• The stock market moves higher on upbeat corporate earnings reports for the second quarter

Senate Republicans rejected the proposal of President Joe Biden on a bipartisan infrastructure deal with a price tag of $1tn. The package that has been negotiated for months and had to be slimmed down several times, remains a number one priority among lawmakers who are hopeful they would reach an agreement early next week.

The vote in the Senate fell short of the 60 votes required to move it further to debates. The proposal only got 49 votes in support of the legislation, and 51 against. Senate Democrats had hoped to receive the needed majority to open the bill for debate along with another separate Democratic package of $3.5tn directed toward child care, education, anti-poverty, and climate changes.

President Joe Biden remained confident the $1tn plan aimed to improve US infrastructure will pass a Senate vote next week. “I think we’re going to get it done,” Mr. Biden said on Wednesday after the first vote failed. “It’s necessary, I mean it. It’s going to not only increase job opportunities but increase commerce,” he also said during an event hosted by CNN in Cincinnati.

Wednesday’s rejection would most likely mean that the timeline for the passage of both the $1tn bipartisan package and the $3.5tn Democratic initiative would have to be extended into mid-Summer.

“We have made significant progress and are close to a final agreement,” the bipartisan group of 22 Senate leaders said in a statement after the vote. “We will continue working hard to ensure we get this critical legislation right—and are optimistic that we will finalize, and be prepared to advance, this historic bipartisan proposal to strengthen America’s infrastructure and create good-paying jobs in the coming days.”

The Crypto Space Experiences A Boost

Meanwhile, stocks enjoyed a second straight day of gains. US equities continued their Tuesday rally and recouped their losses accumulated during Monday’s deep sell-off. All three stock averages climbed over 0.80% each as the broad-based market rally lifted shares across sectors. The Nasdaq Composite finished the day higher by 0.92%, while the S&P500 and the blue-chip Dow Jones closed higher by 0.82%, and 0.83%, respectively.

Market participants’ mood was largely improved by the continued slew of upbeat second-quarter earnings. Coca-Cola, Chipotle Mexican Grill, and Johnson & Johnson all delivered blowout sales figures as they expected the positive growth trajectory to be sustained over the second half of 2021.

In overseas markets, European shares advanced on Wednesday as investors returned with renewed risk tolerance. The pan-continental Stoxx 600 Europe added 1.6% pushed higher by shares of travel, leisure, and retail companies.

Cryptocurrencies received a large dose of optimism on Wednesday. In an online conference called “The B Word”, Elon Musk said SpaceX holds some bitcoin and Tesla is “likely” to resume accepting it again as payment for its electric cars. As a result, the crypto space was largely lifted although, at the time of the

event, bitcoin retreated from its session high of $32,800. Still, the flagship coin pushed higher by roughly 8% on the day and finished trading at $31,700.