U.S. markets and stock exchange traded funds strengthened Wednesday after promising early results from a potential coronavirus vaccine helped fueled hopes that the economy can return to normal.
On Wednesday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 0.2%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) rose 0.9%, and SPDR S&P 500 ETF (NYSEArca: SPY) gained 1.0%.
Lifting market sentiment on Wednesday, Moderna Inc stated that a small-scale study showed its experimental COVID-19 vaccine produced high levels of virus-killing antibodies, Reuters reports.
“The Moderna news woke everybody up again that this is not going to last forever, and there is light at the end of the tunnel. That is why you are seeing such a strong move today into those economically sensitive stocks,” Tim Ghriskey, Chief Investment Strategist Inverness Counsel, told Reuters.
Promising developments on various coronavirus treatments have acted as catalysts for some of the stock market’s biggest moves in recent weeks.
“Every time we get some sort of positive news on the vaccine front, then understandably markets benefit from that,” Paul Jackson, head of asset-allocation research at Invesco, told the Wall Street Journal. “The way it’s looking at the moment, it really looks as though a vaccine is the only hope. This thing is not going away.”
Further adding to the optimism, the Federal Reserve’s Beige Book survey revealed U.S. businesses marked higher activity into the beginning of July as states began easing shutdown measures aimed at quarantining the novel coronavirus pandemic.
However, the markets have been stuck within range after a spike in coronavirus cases and growing uncertainty over how much longer the pandemic will continue to negatively weigh on the economy.
A better-than-expected earnings season may also help propel markets higher. For example, Goldman Sachs surprised Wall Street after reporting a $2.4 billion profit last quarter, or over double the expectation of forecasters and outshining the lackluster results out of JPMorgan Chase, Citigroup, and other banks this week.
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