US stocks jumped Wednesday as continued hopes for a recovery from the coronavirus crisis helped investors shake off questions about a potential vaccine.
The Dow Jones industrial average climbed as much as 359.73 points, or 1.4 percent, to 24,566.59 in early trading to recover most of the prior day’s 390-point loss.
The S&P 500 and the Nasdaq posted early gains as large as 1.5 and 1.7 percent, respectively, after tumbling in a volatile Tuesday session as experts cast doubt on Moderna’s COVID-19 vaccine candidate.
Wall Street appeared to hold onto optimism about states across the US easing lockdowns aimed at curbing the coronavirus without seeing a substantial second wave of infections.
Federal Reserve chairman Jerome Powell also reminded Wall Street that he’s prepared to do whatever it takes to shore up the economy in his Tuesday testimony to the Senate Banking Committee, where he also made the case for more stimulus spending.
“Investors feel like they escaped the Titanic in lifeboats and have been rescued by the USS Jerome Powell,” said Gerald Sparrow, chief investment officer of the Sparrow Growth Fund. “However, markets in rescue operations are like the weather — they’re hard to predict and subject to change.”
Tuesday’s jump came despite lingering questions about the potential coronavirus vaccine produced by Moderna. The biotech company inspired a market rally with its Monday announcement that the vaccine was generating immune responses to the virus in an early trial.
But experts were skeptical because Moderna has not released crucial data from the trial involving just 45 participants, STAT News reported Tuesday. The National Institute of Allergy and Infectious Diseases, which is leading the phase-one trial, also did not comment on Moderna’s announcement.
“Every specialist seems to indicate that a vaccine will take some time to develop, yet markets treat each trial announcement like we are on the cusp of a huge breakthrough that could see everything swiftly return to normal,” said Joshua Mahony, senior market analyst at IG.