The Dow Jones Industrial Average rose to a record high on Wednesday, closing above 32,000 for the first time and seeming to cement a changing of the guard for U.S. equities.

What's happening: So far in 2021, the Dow's mix of financial, health care and retail companies has outperformed the tech heavy Nasdaq, thanks in large part to a rise in U.S. interest rates.

• The increasing cost to borrow has investors writing down the value of not just Big Tech and social media companies, but also fintech and clean energy while betting big on oil, banks and airlines.

Be smart: The bounce in the Dow can also be seen as a catch-up rally for stocks that were unloved during the pandemic, as investors see a light at the end of the COVID-19 tunnel, with vaccine numbers rising and infection numbers dropping.

• Earnings too have rebounded strongly with nearly 80% of S&P 500 companies reporting a positive EPS surprise in the fourth quarter of 2020, the third-highest percentage since FactSet started tracking the measure in 2008.
• Analysts also are marking up their expectations for the first quarter of 2021. First quarter bottom-up EPS estimates have increased by 5%, the second-highest increase during the first two months of a quarter since FactSet began tracking the metric in 2002.

By the numbers: For the year, the Dow has outperformed the Nasdaq marginally, gaining 5.5% to the Nasdaq's 1.4%.

• Much of that separation has been made in the past two months. Since Feb. 1, the Dow has risen 6.9% while the Nasdaq has fallen 2.5%.

Watch this space: Even the Nasdaq's feeble recovery in recent days seems to have been fueled by hedge funds that were forced to cut back on short bets against the Nasdaq to limit losses rather than genuine interest or dip buying, Bloomberg reports.

• While hedge funds were net buyers of stocks for a fifth straight day, short covering outpaced long sales by a ratio of 4 to 1 on Tuesday, according to data from Goldman Sachs' prime brokerage unit.

Yes, but: The question remains whether this is a long-term change in leadership or simply a buying opportunity for smart investors.

• Over the past 12 months, the Nasdaq has risen 56.6% compared to the Dow's 29.9% gain.
• And over a five-year horizon, the Nasdaq is up 175.2% while the Dow has gained 87.6%.

The coronavirus relief package, which won approval in the House Wednesday, includes $60 billion worth of tax hikes on the wealthy and large corporations. (Politico)

The "Build Back Better" infrastructure bill that is expected to be far more expansive than the $1.9 trillion coronavirus relief package could pass a key Senate committee in May and be signed into law by September. (Bloomberg)

The U.S. is on target to meet President Biden's goal that every American adult who wants a vaccine will be able to get one by the end of May. (Axios)

The U.S. is averaging fewer than 50,000 new coronavirus cases per day for the first time since October. (Axios)

Axios Future author Bryan Walsh writes: Global food prices have been rising for months, putting additional pressure on the world's poorest people.

Why it matters: Past spikes in the price of food staples have been connected to periods of social unrest, including the Arab Spring. If prices continue to rise — on top of the pain of the pandemic — the world could be in for a bumpy future.

By the numbers: Global food prices rose by 2.4% in February, according to the Food and Agriculture Organization's Food Price Index.

• That marks the ninth straight month of price rises, causing the index — which is adjusted for inflation — to reach its highest level since July 2014.

Details: In the U.S., prices rose by nearly 3% in 2020, roughly double the rate of inflation, putting pressure on the poorest Americans, who spend more than one-third of their income on food.

• Brazil, which is already dealing with the world's worst active COVID-19 outbreak, experienced the fastest increase in food prices last year relative to inflation.
• In Nigeria — where the average household already spends more than half of its income on food — supply bottlenecks and attacks on farmers have contributed to rising prices.
• India has helped keep prices affordable by spending the most in the world to subsidize food, but it's been racked by farmer protests over plans to unwind that support, which is likely to translate to higher prices and more unrest.

Flashback: Governments are right to worry about the effects of rising food prices. Past spikes in 2011 helped fuel protests in the Arab world, and record-high prices in 2008 contributed to instability throughout the global South.

What they're saying: "These price spikes are destabilizing, not just because they induce a lot of hardship on communities and households, but also because there is this expectation that the government will do something about it," Cullen Hendrix, a nonresident senior fellow at the Peterson Institute for International Economics, told Bloomberg.

• "The implications are going to last longer and beyond the pandemic."

How it works: The food price spike has multiple interlocking causes: COVID-19 lockdowns "are a wrecking ball for food systems," notes Lawrence Haddad, the executive director for the Global Alliance for Improved Nutrition, while broader inflation and extreme weather events like February's winter storms in Texas play a role as well.

Yes, but: Prices are well below their 2011 peak, and there are signs that grain price increases are slowing even as wheat output is forecast to reach a record high of 780 million tonnes next season.

The bottom line: More than politics or the pandemic, it is food scarcity that will bring people out into the streets, which is likely to make the next few months unstable ones.

CEOs of some of the largest companies in the U.S. reported confidence at one of the highest levels on record, according a new survey from the Business Roundtable.

Why it matters: The survey is the latest evidence of the K-shaped recovery, which has seen large companies and wealthy people reporting strong confidence and positive outcomes while small companies and those with little or no wealth face increasing struggles.

By the numbers: The Business Roundtable's overall CEO Economic Outlook Index in the first quarter rose 21 points from Q4 2020.

• Plans for hiring increased 30 points.
• Plans for capital investment increased 16 points.
• Expectations for sales increased 17 points.
• Business Roundtable CEOs also nearly doubled their projections for 2021 U.S. GDP growth, to 3.7% for the year.

On the other side: NFIB's latest monthly small business jobs report, published earlier this week, found the “COVID-19 pandemic continues to disrupt the labor market, especially when some parts of Main Street are still closed or restricted,” according to the group's chief economist William Dunkelberg.

Compare and contrast: “Thanks to American innovation, the heroic efforts of frontline workers and new resources to fight the pandemic, there is increasing reason to be optimistic about the prospects for a swift recovery,” said Business Roundtable president and CEO Joshua Bolten.

• The rebound was “among the sharpest and quickest recoveries in optimism in the history of our survey.”

“Capital spending has been strong, but not on Main Street," Dunkelberg said in a release accompanying NFIB's latest small business optimism survey.

• "The economic recovery remains uneven for small businesses, especially those still managing state and local regulations and restrictions."

Where it stands: Overall consumer confidence has gained steam since the passage of recent coronavirus relief bills, but remains well below pre-pandemic levels, according to surveys from the University of Michigan and the Conference Board.

• Data provider Morning Consult found that since the start of 2021, Americans making over $100,000 a year and those with college degrees have widened the gap in confidence over their less wealthy and less educated peers.