NEW YORK CITY, RAW – The Nasdaq and the S&P 500 indexes have closed at record highs, with the Dow also jumping almost 1.0 per cent after US President Joe Biden embraced a bipartisan Senate infrastructure deal.

As massive fiscal stimulus helped the US economy grow at a 6.4 per cent annualised rate in the first quarter, investors have been banking on an infrastructure agreement that could steer the next leg of the recovery for the world’s largest economy and fuel more stock gains.

Construction and mining equipment maker Caterpillar and aerospace firm Boeing both jumped more than 2.0 per cent, helping lift the Dow Jones Industrial Average.

“In the short term, I think there will be some ‘buy the rumour and sell the news’ in materials and industrials but as we start to see more details come out about how the money will be spent, I think we will get a continued benefit,” said Sal Bruno, chief investment officer at IndexIQ in New York.

Fuelling the S&P 500’s gains more than any other stock, Tesla Inc rose 3.5 per cent after Chief Executive Officer Elon Musk said he would list SpaceX’s space internet venture, Starlink, when its cash flow is reasonably predictable, adding that Tesla shareholders could get preference in investing.

Mega-caps PayPal and Facebook Inc each gained more than 1.0 per cent and were also among the biggest boosts to the S&P 500 and the Nasdaq.

Microsoft added 0.5 per cent and ended with a market capitalisation above $US2 trillion ($A2.6 trillion ) for its first time.

Initial claims for state unemployment benefits fell 7,000 to 411,000 for the week ended June 19, the Labor Department said on Thursday, but were still higher than the 380,000 that economists had forecast.

The Commerce Department said the economy grew at a 6.4 per cent rate last quarter, unrevised from the estimate published in May.

So far this month, the S&P 500 growth index has climbed almost 4.0 per cent, outperforming the value index’s 2.0 per cent drop.

The Dow Jones Industrial Average rose 0.95 per cent to end at 34,196.82 points while the S&P 500 gained 0.58 per cent to 4,266.49 and the Nasdaq Composite climbed 0.69 per cent to 14,369.71.

Volume on US exchanges was 9.2 billion shares, less than the 11.0 billion average over the last 20 trading days.

The S&P 500 technology, healthcare and communication services sector indexes hit record highs.

So far in 2021, the S&P 500 has gained almost 14 per cent, beating the Nasdaq’s 11 per cent rise.

Eli Lilly and Co jumped 7.3 per cent to a record high after the drug maker said it would apply for the US Food and Drug Administration’s accelerated approval for its experimental Alzheimer’s drug this year.

In response, Biogen Inc, which received a controversial approval for its Alzheimer’s drug aducanumab earlier this month, tumbled 6.1 per cent.

MGM Resorts International rose 2.2 per cent after Deutsche Bank upgraded the casino operator’s stock to “buy” from “hold”.

Accenture Plc gained 2.1 per cent after the IT consulting firm raised its full-year revenue forecast.

Advancing issues outnumbered declining ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 2.44-to-1 ratio favoured advancers.

The S&P 500 posted 36 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 105 new highs and 27 new lows.