The stock market finished sharply higher on Tuesday, jumping over 2.5% as Wall Street continued to grow more optimistic about a reopening of the economy and a potential coronavirus vaccine.
The Dow Jones Industrial Average rose 2.2%, just over 500 points, at Tuesday’s open, while the S&P 500 was up 1.2% and the Nasdaq gained 0.2%.
Shares of Maryland-based biotech company Novavax jumped 4.5% after the company said it had started the first human study of its experimental coronavirus vaccine.
Merck shares rose nearly 1.5% after the pharmaceutical company announced that it is working in collaboration with scientific research organization IAVI to develop a vaccine.
Last week, another biotech company, Moderna, reported positive results from its vaccine trial. In total, there are 10 vaccines currently in clinical trials and another 114 in preclinical evaluation, according to a tally from Fundstrat.
Economic data released Tuesday helped boost market confidence: Consumer confidence jumped by more than expected to 86.6 this month, up from 85.7 in April, while new home sales last month also topped estimates.
Progress is also being made on the reopening front, lifting markets higher as several states start to lift lockdowns and allow businesses to resume. Stocks that would benefit from a reopening jumped on Tuesday, including MGM Resorts, Carnival, United Airlines and Southwest Airlines.
“Stock markets posted another day of gains as investor optimism was stoked by easing social distancing restrictions and an economy poised for action,” says Peter Essele, head of portfolio management for Commonwealth Financial Network. “The nation’s largest banks, JP Morgan and Bank of America BAC , neared double-digit returns as long-term Treasuries rates rose more than shorter maturities causing a slight steepening of the yield curve, a positive for names in this sector,” he adds.
The New York Stock Exchange partially reopened for trading on Tuesday, after being closed for more than two months due to workers testing positive for coronavirus. Some 80 brokers will be allowed back onto the floor—about 25% of the number before the pandemic hit. “I’m ready,” a floor trader told CNBC about returning to work.
What to watch for
Rising U.S.-China tensions. Some experts are worried about a derailment of the phase one trade deal—something Trump has repeatedly threatened to do. White House National Security Advisor Robert O’Brien said last Sunday that the U.S. is likely to impose sanctions on China if the country implements a new national security law that would give it greater control over Hong Kong.
Stocks are fresh off their best weekly performance since April: The S&P 500, Dow and Nasdaq NDAQ all rose by more than 3% last week. The S&P is up over 30% from its March 23 low.
I am a New York—based reporter for Forbes covering breaking news, with a focus on financial topics. Previously, I wrote about investing for Money Magazine and was an intern at Forbes in 2015 and 2016. I graduated from the University of St Andrews in 2018, majoring in International Relations and Modern History. Follow me on Twitter @skleb1234 or email me at firstname.lastname@example.org