U.S. stock futures surged after a report said a Gilead Sciences drug showed some effectiveness in treating the coronavirus, giving investors some hope there could be a treatment solution that helps the country reopen faster from the widespread shutdowns that have plunged the economy into a recession.
Dow Jones Industrial Average futures jumped 789 points, indicating an opening gain of about 777 points. S&P 500 futures rose 2.9%. Nasdaq 100 futures climbed 2%. The Nasdaq-100 broke into positive territory for the year on Thursday.
The premarket moves put the S&P 500 on track for its first back-to-back weekly gains since early February. Through Thursday’s close, the S&P 500 has risen 0.35%, while the Nasdaq Composite climbed 4.65%, lifted by double-digit gains in Amazon and Netflix. The 30-stock Dow was down about 0.7% this week through Thursday, dragged down by JPMorgan as interest rates tumbled.
A jump in Boeing shares and a rollout Thursday evening of the White House plan to reopen the economy also added to the bullish tone on Friday.
Gilead shares jumped more than 13% in premarket trading after STAT news reported that a Chicago hospital treating coronavirus patients with remdesivir in a trial were recovering rapidly from severe symptoms. The publication cited a video it obtained where the trial results were discussed.
“An effective treatment is a huge deal and would create a path to open the economy and resume normal ‘social activities’ way sooner than a vaccine,” said Tom Lee, head of research at Fundstrat Global Advisors. “A treatment is safer and more scalable because it is only given to people who need to be treated.”
Other studies have shown remdesivir to be an effective treatment against the coronavirus. However, they have been smaller in scale. Gilead itself also cautioned that anecdotal reports are not enough to determine yet whether the drug will be an effective treatment.
Still, CNBC’s Jim Cramer said the drug could give the economy a “fighting chance.”
“Remdesivir sounds like something that can get people out of hospitals quickly,” Cramer said in a tweet Thursday. “That allows our economy to have a fighting chance..I think that remdesivir would cut the morbidity … which would change how quickly we can open… and what we can do.”
Boeing shares jumped about 7% after the airplane maker said it would resume production in the Seattle area as early as April 20.
Stocks tumbled from record highs in February into a bear market a month later as the spread of the coronavirus roiled market sentiment and the economic outlook. More than 2 million cases have been confirmed worldwide, including over 650,000 in the U.S., according to Johns Hopkins University. Governments urged people to stay home, effectively shutting down the global economy.
But the stock market has rallied since March 23 as new coronavirus cases in the U.S. and globally showed signs of plateauing. President Donald Trump said Thursday that “our experts say the curve has flattened and the peak … is behind us.”
He also issued guidelines to open up parts of the U.S. Thursday night, which identifies the circumstances necessary for areas of the country to allow employees to start returning to work. The decision to lift restrictions will ultimately be made by state governors.
Since late March, the S&P 500 has jumped more than 25% while the Dow has gained 26.6% in that time.
To be sure, the outbreak has already dealt a massive blow to the economy. In four weeks, about 22 million Americans have lost their jobs. Retail sales posted last month their biggest fall on record.
Investors have said that news of an effective treatment or vaccine would be needed for stocks to mount a sustainable comeback.
“If it is effective in keeping someone from contracting the virus or, more likely, simply reduces its severity, that would be a game-changer and [would] allow the economy to restart both more quickly and more fully,” said Jim Paulsen, chief investment strategist at The Leuthold Group, about the Remdesivir trial report.
—CNBC’s Yun Li, Pippa Stevens, and Tom Franck contributed to this report.