(Reuters) – U.S. stock indexes were set to open sharply higher on Monday on optimism fueled by encouraging data from a potential COVID-19 vaccine trial, with investors also counting on more stimulus to rescue the economy from a deep economic slump.
Investors have kept a close eye on the vaccine programs of several drugmakers, cheering any positive development amid fears of a second wave of infections as governments start easing restrictions.
Drugmaker Moderna Inc (MRNA.O) said its experimental vaccine for COVID-19 showed promising results in an early stage study. The stock jumped 26% in premarket trade.
Markets were also encouraged by Federal Reserve Chairman Jerome Powell’s remarks over the weekend on a gradual economic recovery, and his affirmation that more monetary stimulus was on the way if required.
Powell also said the most important data for the U.S. economy right now are the “medical metrics” around the coronavirus pandemic and sectors such as travel and entertainment would remain under pressure.
“Powell has also indicated something that was very important – that the full recovery is based on finding a vaccine. It’s basically fueling hope. It’s all about the economy and the reopening of some of the states and reopening countries around the world,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
Wall Street’s three major indexes closed higher on Friday as investors weighed worries about Sino-U.S. trade relations and weaker-than-expected U.S. economic data against growing optimism that easing coronavirus restrictions would boost activity this month.
However, they posted a weekly loss as uncertainty still persisted over how the world would emerge from the coronavirus. U.S. stock indexes have stuck to a tight range after recovering from multi-year lows hit in March.
Cruise line operators Carnival Corp (CCL.N), Royal Caribbean Cruises Ltd (RCL.N), Norwegian Cruise Line Holdings Ltd (NCLH.N) jumped more than 7% as well as carriers like Delta Air Lines Inc (DAL.N) and United Airlines Holdings (UAL.O) gained more than 7% and 8.4%.
At 8:11 a.m. ET, Dow e-minis 1YMcv1 were up 663 points, or 2.82%. S&P 500 e-minis EScv1 were up 74.5 points, or 2.62% and Nasdaq 100 e-minis NQcv1 were up 186.25 points, or 2.05%.
General Motors Co (GM.N) rose 5.2% and Ford Motor Co (F.N) 4% as they prepared to reopen their North American factories in a push to restart work in an industry that accounts for about 6% of U.S. economic activity.
Apple Inc (AAPL.O) rose 1.9% as the iPhone maker said it would reopen more than 25 of its branded stores in the United States this week.
Reporting by Ambar Warrick and Medha Singh in Bengaluru, additional reporting by Pawel Goraj in Gdansk; Editing by Saumyadeb Chakrabarty