US stocks climbed back into bullish territory on optimism for another round of stimulus and an eventual move toward reopening the economy. Oil surged amid expectations for production cuts.
The benchmark S&P 500 Index rose as much as 3.4%, sending the gauge 20 per cent over its March 23 low, which tradition says signals a bull market. Real estate, energy and utilities led the gains in all 11 market sectors.
“Markets appear to be weighing the good with the bad,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “In lieu of real-time economic data, we’re seeing the markets latch onto signs of optimism around the pandemic.”
Oil spiked a few minutes ahead of the close after Algeria confirmed that the OPEC+ emergency meeting will discuss an output cut of 10 million barrels per day. A spokeswoman for Russian energy ministry said the nation will commit to cuts based on its proportion of the total production.
Earlier, Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, said the start of a turnaround in the fight against the coronavirus could come after this week. President Donald Trump tweeted about reopening sooner rather than later.
The Stoxx Europe 600 Index ended little changed after euro-area finance chiefs failed to agree on a $540 billion economic package to respond to the pandemic.
While stock are rallying, many investors remain reluctant to take big risks while forecasts are for the virus to grow rapidly in some of the biggest economies — the U.S., Japan, Germany, France and the U.K. They’re also concerned that fiscal stimulus measures will be too late or not enough.
“There’s still a lot of uncertainty in markets,” said Kevin Caron, portfolio manager for Washington Crossing. “Whether it’s some tentative plans or at least a vision to get the economy restarted again, that’s all something the market can ponder.”
Elsewhere, Italian bonds took a hit and the euro headed for its seventh drop in eight days against the dollar as the officials struggled to reconcile visions for how to recover from the virus.
France’s first-quarter output shrank the most since World War II, the latest indicator of the severity of the shock to the world’s biggest trading region.