All three major U.S. indices rose, with the S&P 500 up as much as 0.7%. The 10 year treasury yield rose to 0.71% from 0.66%, a risk-on sign. The rally was fairly broad, across the tech, consumer discretionary and banking sectors.
"The market mood somewhat bettered on prospects of business reopening, as US President Donald Trump said they need to get the economy running,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote Bank in emailed remarks to reporters.
Investors may be willing to tolerate risk, with stocks at expensive valuations against virus risks and risks related to the pace of an economic recovery. The market is sitting on records amounts of ash — $4.7 trillion worth — which has been raised during the bear market this year and the equity market run since Mach 23. The cash holdings are a sign of caution, but it also means investors are willing to add incremental risk to their portfolios if there are any positive market or economic signals.
This week, the S&P 500 has gained 2% after having dropped a bit more than 3% from Thursday to Monday morning.
Importantly, the ADP jobs report showed more than 20 million job losses for April, another piece of economic data the market is looking past on hopes of a strong recovery as the virus' spread abates.
Lyft (LYFT) - Get Report reports earnings after the close Wednesday. Revenue and rides estimates have been battered. The stock now trades at a steep discount to Uber (UBER) - Get Report, but is still down almost 1% Wednesday.