Despite a surge in coronavirus cases across the country, the market opened higher on Wednesday, the first day of the third quarter, after stocks got a boost from positive coronavirus vaccine news and strong jobs data.
The Dow Jones Industrial Average was up 0.5%, over 100 points, at Wednesday’s open, while the S&P 500 rose 0.6% and the tech-heavy Nasdaq Composite gained 0.4%.
A new study of a potential coronavirus vaccine developed by Pfizer and BioNTech on Wednesday showed positive results creating neutralizing antibodies in patients.
While the results were released online, they have not yet been reviewed by a medical journal. Shares of Pfizer jumped more than 5% on the news.
Stocks slashed earlier losses after ADP and Moody’s Analytics said that private payrolls jumped by 2.37 million in June, while payrolls for May were revised to a gain of more than 3 million, from a loss of 2.76 million.
Shares of companies that would benefit from a reopening of the economy—including airlines, cruise stocks and some retailers—moved higher on Wednesday.
On Tuesday, Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin both testified in front of the House Financial Services Committee, but provided different opinions on the timeline for an economic recovery.
Secretary Mnuchin said he expected economic conditions to “improve significantly” in the second half of the year, while Fed chair Powell took a more measured approach, warning that “the path of the economy is highly uncertain.”
“Seriously, we’re doing this again?” says Vital Knowledge founder Adam Crisafulli of the latest vaccine news. “Investors really need to stop chasing these reports.”
What to watch for
The stock market’s recent gains come amid a backdrop of increasing coronavirus cases across the country, with record numbers of new infections forcing many states in the South and West to walk back or delay reopening plans. Eight states reported record high numbers of cases on Tuesday, while more than 12 have now paused or rolled back their reopening plans. White House health advisor Dr. Anthony Fauci warned on Tuesday that at the current pace of new cases, the United States could soon surpass 100,000 new infections per day.
The market closed out its best quarter in decades after finishing higher on Tuesday. Stocks have bounced sharply from their coronavirus recession lows in late March: The Dow surged 18% in the second quarter, its best quarter since 1987. The S&P jumped over 20% for its best quarter since 1998. Both are still down for the year, however: The Dow by 11% and the S&P by nearly 5%.