Floor trading reopened at the New York Stock Exchange Tuesday. New York Governor Andrew Cuomo rang the opening bell, and traders exulted in cheers. It was the perfect setting for investors’ unbridled enthusiasm about the markets.
The Dow rocketed 600 points higher and the broader stock market rallied, buoyed by optimism over the continued reopening of the economy and a new potential coronavirus vaccine.
The S&P 500, which is the broadest measure of Wall Street, kicked off 2.2% higher. The Nasdaq Composite was up 1.9%.
The economy has been decimated by stay-at-home orders that forced businesses to close, put millions of people out of work and sent stocks tumbling into a bear market. Although the economy remains in the toilet, investors have decided to wear their rose-colored glasses lately.
Boosting markets’ optimism Tuesday, US biotechnology company Novavax announced that it is starting a human trial for a Covid-19 vaccine candidate in Australia. The company’s shares opened 16% higher.
Also helping lift investors’ spirits, Memorial Day travel was modestly higher than over the past several weeks, giving markets hope that business is starting to return to life. Travel and leisure companies led Tuesday’s gains, as local economies continued to reopen gradually across America.
And policymakers pledged to continue to pump the economy full of stimulus to stave off a collapse.
On Friday, White House economic adviser Kevin Hassett said he expects Congress and President Trump to agree on a “fourth wave” of economic stimulus “sooner rather than later.”
“Risk appetite has been improving for a good couple of months now, partly on hopes over a vaccine but mainly because of expectations that the massive central bank and government stimulus packages announced in response to Covid-19 pandemic will fuel a speedy recovery in demand,” said Fawad Razaqzada, market analyst at ThinkMarkets.
All that positive sentiment in the market is weighing on traditional safe haven bets like gold, the US dollar and US Treasury bonds.
The New York Stock Exchange reopened its floor after a two-month hiatus on Tuesday. Floor trading closed May 18 as the city shut down to limit the spread of coronavirus. Although stocks trade digitally, some floor brokers still work on the NYSE site.
