Stocks rose Monday as hopes for a coronavirus vaccine hitting the market soon were apparent in U.S. equities.
The S&P 500 rose as much as 0.45%, held back by losses on the tech-heavy Nasdaq, down as much as 0.7%. The 10-Year Treasury yield spiked to 0.64% from 0.58%. Yields rise when prices fall.
Tech stocks have flown high in recent weeks and have been prone to volatility. In the past two days, cyclical value, trading at much lower valuations than growth stocks even compared to history, has begun to take a turn leading the market.
But the big point of optimism Tuesday: Russia President Vladimir Putin said the country has developed the world’s first coronavirus vaccine.
The global stock market tends to rally on any hint of positive vaccine news, even if there are caveats upon the initial news item.
Not only were cyclical stocks rising — banks were up about 4% as the yield curve meaningfully expanded — but Moderna (MRNA) - Get Report was down almost 5%. Gilead Sciences (GILD) - Get Report was down 0.1%. BioNtech (BNTX) - Get Report was down 8.5%.
Also, Trump told reporters he wants to lower the capital gains tax, which would attract financial capital to U.S. That may be aiding the positive sentiment Tuesday, although European indices outperformed the Dow Jones Industrial Average, which is not tainted by a heavy technology presence. The German DAX rose almost 2.5% while the FTSE 100 rose 2%. The vaccine news certainly wasn’t hurting.
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