Dow jumps 559 points as investors cheer signs the coronavirus outlook is improving
US stocks rose on Tuesday as investors cheered signs the spread of the coronavirus pandemic may be easing. Earnings season also kicked off in earnest, with traders monitoring the virus’ impact on corporate profits.
JPMorgan, Johnson and Johnson, and Wells Fargo reported results before the opening bell. JPMorgan and Wells Fargo both reported large profit declines, sending their stocks down more than 2%.
Johnson and Johnson climbed roughly 5% after reporting a jump in profit as consumers flocked to their products during the coronavirus pandemic. Amazon rallied to an all-time high, while Tesla jumped as much as 14% on an upgrade from Credit Suisse.
Slowing Outbreak Breeds New Optimism
Investors are also looking for optimism around the coronavirus outbreak in the US. On Monday, President Donald Trump said he’d like to reopen the country “ahead of schedule,” without giving any further details. New York Gov. Andrew Cuomo also said on Monday that it appears the worst is over in what has become the epicenter of the US crisis.
“Caution and unease are set to engulf financial markets ahead of one of the most uncertain earnings seasons for years, as it is expected to offer a bitter appetizer of the painful blow the coronavirus outbreak has dealt to US corporations,” Lukman Otunuga, a senior research analyst at FXTM, told Business Insider.
He added: “Nevertheless, investors remain somewhat hopeful that the pandemic may be peaking, and this sentiment was reflected across Asian markets on Tuesday morning.”
The recent optimism stands in contrast to mounting data that shows the US and the world in economic distress. Nearly 17 million Americans have filed for unemployment benefits in just three weeks as coronavirus layoffs persist. Further, the International Monetary Fund said on Tuesday that the “great lockdown” global recession will be the worst since the Great Depression.
Meanwhile, West Texas Intermediate crude oil slumped 8% as lower demand from the coronavirus crisis outweighed historic production cuts by OPEC and its allies over the weekend. Gold traded mixed after reaching a seven-year high on Monday amid investor appetite for safe-haven assets.