Wall Street soared Monday after U.S.-based drugmaker Moderna said it has seen “positive” results from its first human trial for a vaccine against COVID-19, prompting hope among investors that economic recovery could be on the horizon.
The Dow Jones Industrial Average was up by around 830 points by midday Monday, with the S&P 500 notching up a gain of by 3 percent and the Nasdaq higher by 2.3 percent.
Tourism and airline stocks also rose, with Delta Air Lines, American Airlines, and United seeing double-digit gains. MGM Resorts, Carnival Cruise Line and Disney also rallied, on the possibility of a return to travel and entertainment.
Moderna’s vaccine trial showed it can prompt an immune response in the human body, and was also found to be safe and well tolerated in a small group of patients. The drug is now being tested in larger studies.
“We could not be happier about this interim data,” said Stéphane Bancel, chief executive of Moderna, based in Cambridge, Massachusetts. He said the results indicate the vaccine has a “high probability to provide protection from COVID-19 disease in humans.”
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Markets also received a boost after Federal Reserve Chairman Jerome Powell hinted that the economy would pick up pace later this year.
“Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of this year,” Powell told CBS’s “60 Minutes,” in an interview that aired on Sunday night.
He also pointedly referenced the discovery of a vaccine as key to economic recovery.
“For the economy to fully recover, people will have to be fully confident. And that may have to await the arrival of a vaccine,” Powell said.
“The sooner we get the virus under control, the sooner businesses can reopen. And more important than that, the sooner people will become confident that they can resume certain kinds of activity. Going out, going to restaurants, traveling, flying on planes, those sorts of things. So that’s really going to tell us when the economy can recover,” Powell said.