Stocks around the world whipped higher Wednesday, riding a wave of optimism on encouraging data about a possible treatment for COVID-19. The upswell of hope was so strong that investors completely sidestepped a report showing the outbreak drove the US economy to its worst quarterly performance since the Great Recession, the AP reports. The S&P 500 vaulted 2.7% higher and extended a rally that’s brought the US stock market to the brink of its best month in 45 years. The Dow Jones Industrial Average rose 532.31, or 2.2%, to 24,633.86, and the Nasdaq climbed 306.98, or 3.6%, to 8,914.71.
The spark for Wednesday’s rally was a report that the experimental drug remdesivir proved effective against the new coronavirus in a study run by the National Institutes of Health. The nation’s top infectious diseases expert said the drug reduced the time it takes patients to recover, and it raised hopes that life around the world may eventually tiptoe back toward "normal." "What you’re finding now is you have this debate between optimism and realism," says Adam Taback, chief investment officer for Wells Fargo Private Wealth Management. Oil prices, bonds, and other markers have been hit hard by the outbreak. "Everything except equities is telling you things are not great," Taback says. "This market is overly optimistic.” (Read more Dow Jones stories.)