The Dow Jones Industrial Average had its highest closing day since February on Monday. The news followed the announcement of progress in the development of a COVID-19 vaccine and the announcement of Democrat Joe Biden’s victory in the 2020 presidential election this weekend.
The Dow Jones closed the day with a gain of around 835 points, having previously gained more than 1,700 points during Monday’s trading day. The S&P 500 also rose by about 41 points or 1.2 percent according to The Wall Street Journal, its second highest closing level in history.
Today was the Dow’s best performance since June. However, the index fell short of its all-time high from February.
JPMorgan expects the S&P to continue to rise and, according to a report from CNN, expects to exceed its previous target of 3,600 points by the end of the year. JPMorgan believes the index could climb to 4,000 points by early 2021 and to 4,500 points by the end of next year.
The market’s performance on Monday followed Democrat Joe Biden’s announced victory over President Donald Trump in the 2020 election this weekend.
Although the total number of votes is not yet official and Trump has not yet yielded, Associated Press and other major TV stations called the election for Biden on Saturday as he narrowly won in Pennsylvania. With the state’s 20 voters, Biden exceeded the 270 votes needed to secure the White House.
Saturday’s announcement ended the long-awaited anticipation, and since there was no “blue wave” of Democrats controlling both houses of Congress, investors have begun redistributing their portfolios, according to NBC News.
With a more balanced legislative power, traders believe restrictive measures, including tightening regulations and increasing taxes, are unlikely to get through, according to NBC News.
The positive development of the market also came after Pfizer and German partner BioNTech published a study on Monday that said their vaccine, BNT162b2, prevented more than 90 percent of COVID-19 infections. Pfizer is the first pharmaceutical company to publish data from an extensive Phase 3 study.
Pfizer’s stock closed at nearly 8 percent with the publication of the study data, as it gave Wall Street hope for a return to normality before the coronavirus pandemic triggered historic economic turmoil around the world.
“The strong results from Pfizer’s vaccine were better than most expected and mean that we could reopen earlier than expected,” Ryan Detrick, Chief Market Strategist at LPL Financial, told CNN on Monday.
The vaccine news caused positive waves in pharmaceutical stocks, including the Dow components Merck and Johnson & Johnson. The news also helped industries that were severely affected by the pandemic, with stocks of hotels and restaurants, cruise lines and airlines rising.
However, stocks that benefited from the new stay-at-home culture, such as Zoom, Amazon and Netflix, fell.