U.S. futures surged forward on Monday due to new data about a potential coronavirus vaccine. Drugmaker Moderna Inc announced that its experimental COVID-19 vaccine showed promising results during a small early-stage trial. The company’s shares jumped by 23% due to this news.
Investors are also hopeful that the authorities pump in more stimuli to boost the U.S. economy. As a result, the market rallied on Tuesday. The Dow Jones Industrial Average soared by 3.24% at 24,453.18, while the S&P 500 climbed up by 2.93% at 2,947.73. Meanwhile, the Nasdaq Composite gained 2.42% at 9,232.45.
The S&P 500 index was on track for its biggest one-day percentage gain in five weeks, as all 11 major indexes were trading higher. The S&P 500 has traded in a tight range in May. However, it has already risen by 34% from the multi-year low hit in March.
Meanwhile, energy stocks skyrocketed by 6.4%. This is after oil prices jumped on the prospect of higher demand, as economic activity slowly resumes worldwide. General Motors Co rallied by 8.7%, and Ford Motor Co by 6.7%. This occurred as they prepared to reopen their North American factories.
Rick Meckler, is a partner at Cherry Lane Investments in New Jersey. He stated that if there is a workable vaccine that can be mass-produced, it will be a game-changer for many industries that couldn’t solve their problems by reopening.
What about travel stocks?
Travel-related stocks, such as cruise line operators Royal Caribbean Cruises Ltd, Carnival Corp, and Norwegian Cruise Line Holdings Ltd, soared from 13% to 18%. The airlines’ subindex also gained 9.3% as Delta Air Lines announced that it would resume flying several major routes in June.
Even though easing lockdowns raised the risk of another wave of infection, it also sparked hopes for an economic rebound. Over the weekend, Federal Reserve Chair, Jerome Powell, remarked on a gradual recovery as well. He affirmed that more monetary stimulus was on the way if required, further boosting the futures. However, Powell also stressed the importance of a vaccine in establishing economic normalcy.
