Bad news is good news, but good news is even better!

Stocks rocketed higher on Tuesday, and the SP500 index, along with the Nasdaq index, rose to new all-time highs. The Dow lagged. 

The market optimism has been encouraged by hopes of an interim fiscal package to help the US economy recover from the damage inflicted by the coronavirus. On Tuesday, House Speaker Nancy Pelosi indicated she would drop many of her initial proposals to seal a deal. It looks like a new stimulus package is on its way. 

Additionally, the Fed is still printing billions of US dollars, which is supporting the stock market. Put it this way – in the current environment, the US economy doesn’t even have to exist anymore, and stocks would most likely go higher anyway. 

Later in the day, the FOMC minutes from the July’s monetary policy decision will be released, which should be bullish for stocks again as the minutes are expected to show a very dovish Fed. 

From other news, the UK CPI improved to 1% YoY in July, up from 0.6% previously. Market participants will also pay attention to the euro zone’s CPI numbers, with investors forecasting a 1.2% YoY inflation in the euro bloc.