U.S. stocks jumped on Tuesday as optimism that the Trump administration could move to ease lockdowns from the coronavirus overshadowed worrying earnings reports from JPMorgan and Wells Fargo.
White House adviser Larry Kudlow said President Donald Trump would make a number of announcements about re-opening the U.S. economy in the next day or two as the health crisis appeared to be ebbing, although some state governors have said the decision to re-start businesses lies with them.
New York’s total hospitalizations fell for the first time since the onset of the novel coronavirus pandemic, Governor Andrew Cuomo said.
“The market is going up on prospects of the economy reopening soon and also the coronavirus (possibly) reaching some sort of peak,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The market could be in store for further sharp selling in the coming months as data showing the extent of the economic damage from virus is released, he said. “We’re going to see (macroeconomic) numbers that are going to be frightening, and that will weigh.”
Analysts have warned of a torrid earnings season as the containment measures brought business activity to a halt.
JPMorgan Chase & Co <JPM.N> and Wells Fargo & Co <WFC.N> reversed early gains to end lower. First-quarter profits plunged, with both banks setting aside billions of dollars to cover potential loan-losses from the pandemic.
The Dow Jones Industrial Average <.DJI> rose 558.99 points, or 2.39%, to 23,949.76, the S&P 500 <.SPX> gained 84.43 points, or 3.06%, to 2,846.06 and the Nasdaq Composite <.IXIC> added 323.32 points, or 3.95%, to 8,515.74.
The Nasdaq registered a fourth straight day of gains, and Amazon.com <AMZN.O> rose more than 5%.
(Additional reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Shounak Dasgupta, Dan Grebler and Sonya Hepinstall)