US Stock Market is Rallying on Economic Reopening Optimism
US stock markets have come out of bearish trend on Monday as all three top indices reported strong gains amid hopes over coronavirus vaccine and economic reopening.
Although the futures were pointing gains in Monday trading, but the report from Moderna regarding the positive trial results for antibodies attained investor’s focus and helped Dow Jones Industrial Average to have its best one day gain since April 6.
S&P 500 rallied almost 3.2% to the highest level since March 6 while Nasdaq advanced nearly 2.4% to mark the best one day gain since the beginning of this month.
The US stock market futures are once again indicating the investor’s optimism over the recovery in economy as Fed chairman said on Sunday in an interview that the US economy is likely to recover in the second half of the year and betting against the American economy wouldn’t a good idea.
“We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs that we have.”
Several stocks that had been struggling over the past couple of months reported massive gains, Disney closed more than 7.15% higher, and MGM Resorts rose 10.5% while Carnival jumped 15.2%. Airlines stocks have also generated robust gains. Delta and United Airlines stock price surged close to 13%.
Oil price rally helped the energy sector to outperform the rest of the market on Monday as economic reopening across the world has been steadily lifting oil demand. The International Benchmark Brent and US oil have hit the highest level in the last two months on Monday.
“The focus moving forward will be on the opening of the economy, how quickly can it be done, and how safe can it be done,” said Quincy Krosby, chief market strategist at Prudential Financial. That’s why those announcements on “therapeutic curative treatments and vaccines are going to be very important.”