Stock futures climbed higher in overnight trading on Tuesday after Moderna said its coronavirus vaccine produced antibodies in all patients in an early trial, raising hope for a faster economic recovery.
Futures on the Dow Jones Industrial Average jumped 300 points, pointing to a 270-point gain at Wednesday’s open. The S&P 500 futures and the Nasdaq 100 futures rose 0.7% and 0.5%, respectively.
Biotech Moderna‘s potential vaccine to prevent Covid-19 produced a “robust” immune response, or neutralizing antibodies, in all 45 patients in its early stage human trial, according to newly released data published Tuesday evening in the peer-reviewed New England Journal of Medicine.
Shares of Moderna surged more than 12% in after-hours trading on Tuesday. Stocks directly tied to an economic reopening jumped following the vaccine news. American Airlines, United Airlines, Royal Caribbean Cruise all popped more than 4% each in extended trading.
“This should further increase confidence that we are getting a robust immune response, in that there should be greater confidence that this will be protective to a degree in transmission of Covid,” Michael Yee, a managing director at Jefferies, said on CNBC’s “Fast Money.” “This is all along our positive thesis and our view that both Moderna and Pfizer-BioNTech are definitely on a good track to get a vaccine by the end of the year.”
Stocks finished Tuesday’s volatile session on a high note with the Dow jumping more than 500 points to post its best day in two weeks. The S&P 500 jumped 1.3%, boosted by cyclical names sensitive to the economic recovery. The tech-heavy Nasdaq underperformed for a second day, rising 0.9% as the massive rally in Big Tech slowed down.
Investors will monitor another batch of corporate earnings results on Tuesday with Goldman Sachs, UnitedHealth, Bank of NY Mellon, U.S. Bancorp and PNC Financial all set to report before the bell.
Earnings from big banks so far have been mixed. JPMorgan Chase reported better-than-expected quarter results on the back of a massive surge in trading revenue. Wells Fargo suffered a $2.4 billion loss and cut its dividend to 10 cents per share.
Meanwhile, tensions between the U.S. and China continue to rise. President Donald Trump said Tuesday that he signed legislation to impose sanctions on China in response to its interference with Hong Kong’s autonomy.
— CNBC’s Jesse Pound contributed reporting.
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