Stocks surged on Wednesday after Vermont Sen. Bernie Sanders dropped out of the presidential race, relieving some of Wall Street’s political concerns amid the economic crisis stemming from the coronavirus.
The Dow Jones Industrials screamed higher 779.71 points, or 3.4%, to 23,433.57
The S&P 500 jumped 90.57 points, or 3.4%, to 2,749.98. Energy was among the best-performing sectors in the S&P 500, jumping more than 6%. Health-care rallied more than 4%.
The NASDAQ Composite popped 203.64 points, or 2.6%, to 8,090.60. Hope the U.S. could start to turn a corner on the coronavirus outbreak in the near future also lifted equities.
The major averages hit their session highs after Sanders made his announcement. Some of Sanders’ policy proposals, including Medicare for All, raised concern among several business owners and investors who feared taxes would go up under his presidency.
Wednesday’s news puts former Vice President Joe Biden — who is seen by Wall Street as a more market-friendly candidate — closer to the Democratic nomination.
Stocks pressured by the coronavirus outbreak led the way higher. Carnival, Norwegian Cruise Line and Royal Caribbean all advanced at least 6.1%. MGM Resorts gained 10.1% while Wynn Resorts climbed 13.5%. United led airline stocks higher with a 12.4% jump. American gained 10.4%, and Delta traded higher by 4.4%.
In the U.S., the number of daily increases in coronavirus cases has fallen since Friday, according to data from Johns Hopkins University. Daily increases in global cases have also fallen since then.
Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told the media on Wednesday that the U.S. death count related to the coronavirus is now lower than initially thought, noting there should be a turnaround after this week. He added, however, virus efforts should be intensified.
However, some investors believe equities were getting ahead of the reality where coronavirus shutdowns are likely to weigh on the economy significantly beyond the second quarter. The major averages have rallied about 20% from their March 23 lows.
The Federal Open Market Committee released the meeting minutes from its March emergency meeting. The summary showed “all participants viewed the near-term U.S. economic outlook as having deteriorated sharply in recent weeks and as having become profoundly uncertain.”
Prices for the 10-Year U.S. Treasury faded, lifting yields to 0.77% from Tuesday’s 0.73%. Treasury prices and yields move in opposite directions.
Oil prices gained $2.52 to $26.15 U.S. a barrel.
Gold prices picked up $4.60 to $1,679.10 U.S. an ounce.