Futures for the Dow Jones Industrial Average (YMZ0)(DJI) were up 1,521, or 5.4%, at 29,720, those for the S&P 500 index (ESZ0)(S) up 130.80 points, or 3.7%, at 3,632, while Nasdaq-100 futures (NQZ0)(NASDA) advanced 102.25 points to reach 12,177, a gain of 0.8%.
Markets were ebullient early Monday after Pfizer (PFE) and BioNTech (BNTX) said their BNT162b2 vaccine candidate was found to be more than 90% effective in preventing COVID-19 in trial participants without previous evidence of SARS-CoV-2 infection.
The companies said they are planning to submit for Emergency Use Authorization (EUA) to the Food and Drug Administration soon after the safety milestones are met, which is currently expected in the third week of November.
The report helped to deliver a fresh fillip to a market that had already been upbeat on clarity on the election front.
On Saturday, Biden was seen achieving the required 270 Electoral College votes to secure the presidency from Trump, four days after Election Day, reducing the prospect of a drawn-out vote count in a testy race for the White House that had the potential to roil markets, at least in the near term. Trump has yet to concede, however, and his campaign continued to press legal challenges in several states.
Big gains last week, the strongest since April, came on rising expectations that Biden would be declared the winner and a divided Congress would result in a scenario that many investors view as less likely to result in changes to policy that might be seen as disruptive, including higher taxes and tightened regulation.
“While the control of the U.S. Senate is still to be determined, markets are reacting as if Republicans will continue to hold this part of Congress. If this is true, taxes are likely to remain at current low levels and interest rates will stay near zero for a long time,” wrote Hussein Sayed, chief market strategist at FXTM in a Monday research note.
“That is the best environment for growth stocks, particularly the tech sector. Hence, they are continuing to outperform the broader market,” the FXTM analyst wrote.
To be sure, incumbent Trump has threatened to fight the election results, but few experts believe there are viable paths to reversing the outcome and market participants appeared willing to look past that concern.
“Joe Biden won the U.S. presidential election but there are no signs that President Trump will concede, and that suggests that we are likely to be in for a long drawn-out affair with respect to the validity of certain state results,” wrote David Madden, market analyst at CMC Markets UK.
“For now, traders are not worried about a possibility of anything other than Joe Biden becoming U.S. president in January,” he said.