Futures, pegged to major US stock averages, rose early Tuesday morning after days of profits on Wall Street pushed the S&P 500 within striking distance to a record high.
The Dow Jones Industrial Average futures rose 260 points, or 1%. The move indicated a gain of around 240 points when the market opened. S&P 500 futures gained 0.6%. The Nasdaq 100 futures were up 0.25%. The S&P 500 closed just 0.97% on Monday from its February record.
The surge comes shortly after local news outlets reported that Russian President Vladimir Putin alleged the country granted regulatory approval for the world's first Covid-19 vaccine.
While there was skepticism about whether Russia had developed a safe vaccine so quickly, the news sparked optimism among investors about the race for vaccination and perhaps that the market is not pricing in how quickly a valid vaccine could be ready.
Stocks of stocks that would benefit the most from a vaccine rose in premarket trading. American Airlines grew 6%. Norwegian Cruise Lines also rose 6%. Casino stocks rose. The mall's owner, Simon Property Group, was higher. Goldman Sachs raised its outlook for economic growth over the weekend, forecasting at least one vaccine to be approved by the end of this year and the drug to be widely used by the second quarter of next year.
The 30-share Dow gained around 350 points in regular trading on Monday, recording its seventh positive session in a row – the longest winning streak since September 2019. The S&P 500 gained 0.2% and was thus just under below its record high in February. Meanwhile, the Nasdaq underperformed, losing 0.4% as investors left some of the high-flyers.
"Markets look forward to better days," said Jeff Buchbinder, equity strategist at LPL Financial, in a note. "Although the timing is uncertain, the stock market is confident that with one vaccine – or multiple vaccines – and better treatments in the meantime, the pandemic will end."
Investors were still grappling with the uncertain fate of yet another coronavirus stimulus aimed at helping Americans struggling during the pandemic.
Treasury Secretary Steven Mnuchin said Monday the White House was open to resuming coronavirus relief talks with Democrats and putting more aid money on the table to reach a compromise.
Senate Majority Leader Mitch McConnell said in a tweet Monday that he hopes lawmakers will finalize the bill this week and that he is glad President Donald Trump "stepped in to soften the blow of their hostage tactics."
Over the weekend, Trump signed four executive orders to extend some coronavirus grants, including unemployment benefits, a wage tax vacation, postponing student loan payments through 2020, and expanding federal eviction protection.
"Given the limited scope of the deal and the positive market reaction, equity investors still have the likelihood of reaching a larger settlement," said Mark Hackett Nationwide, chief of investment research, in a statement Monday.
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