(Bloomberg) -- Stocks surged the most in almost six weeks after promising early results for an experimental vaccine sparked speculation economies could snap back quickly. Crude oil advanced and yields on Treasuries rose.
The S&P 500 surged 3.2% after Moderna Inc. said its vaccine tests yielded signs it can create an immune-system response in the body. Companies that would benefit from a return toward more normal economic activity rallied. Carnival Corp. jumped 15%, while Delta Air Lines and Live Nation Entertainment climbed more than 13%. Energy producers popped 7.5% and real-estate firms added almost 5%.
The risk-on rally comes as more economies around the world and within the U.S. ease restrictions that created one of the steepest downturns since the Depression. Federal Reserve Chairman Jerome Powell stressed the central bank has more ammunition to combat weakness. The Stoxx Europe 600 jumped the most since March, while indexes in Japan, Hong Kong and South Korea all posted modest advances.
“Powell addressing that the Fed is not out of ammo combined with positive vaccine trial data has set the markets off to the races,” said Matt Miskin, co-chief investment strategist at John Hancock Investment Management. “It just shows that sentiment can change so quickly in times like these.”
Gold traded at its highest price in seven years before retreating, while West Texas oil rose above $30 a barrel for the first time in two months as producers in the U.S. and elsewhere continued to cut activity.
While Powell said the U.S. economy’s recovery could stretch to the end of 2021, he added that policy makers are “not out of ammunition by a long shot.” Several European countries ended bans on short selling, as they continued to report the lowest number of daily deaths from the virus since March.
“The market is very tied to measuring the success of these economic reopenings,” said Jeffrey Kleintop, chief global investment strategist for Charles Schwab & Co. “A successful vaccine would really make those reopenings very successful. The market is excited about that news although it would be a long time until the vaccine is developed.”
Elsewhere, industrial metals climbed after China announced guidelines to revive large infrastructure projects. Currencies of ore and crude oil exporters strengthened, from Norway’s krone to the Australian dollar.
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