The prospect of the imminent release of an effective coronavirus treatment led to a surge in stock prices in the US on Wednesday. Major stock prices rallied throughout the day on the prospect, which had managed to shrug off negative GDP data and warnings from the US Federal Reserve.
Among the biggest gainers throughout the day were major US tech companies, which lifted the figures of the S&P 500 and the NASDAQ. Major US stocks managed to climb close to their record levels before the start of the pandemic in the country.
During the day, the Dow Jones Industrial Average climbed by 2.21 percent to 24,633.86. The NASDAQ Composite Index rose by 3.57 percent to 8,914.71, while the S&P 500 rose by 2.66 percent to 2,939.51. Almost all of the 11 major sectors in the S&P 500 were in the green, with the exception of consumer staples and utilities. The NASDAQ managed to post 42 new highs and 1 new lows, while the S&P 500 posted 5 new 52-week highs and no new lows.
The rally comes after US drugmaker Gilead Sciences announced that its treatment called Remdesivir is showing promising results against the coronavirus. The news also boosted the company's own share prices, which surged by more than 5.7 percent.
The good news managed to overshadow negative data released by the Commerce Department, which showed how the US economy had its worst decline in over a decade during the first quarter of 2020. According to its report, the country's gross domestic product (GDP) had contracted at a 4.8 percent quarterly annualize rate.
The data provided by the Commerce Department was followed by a bleak statement issued by the Federal Reserve after its two-day monetary policy meeting. Federal Reserve chairman, Jerome Powell, mentioned in a statement that the economy could continue to drop and reach unprecedented levels. However, he did speculate that the economy will rebound once the restrictions are lifted and the pandemic is placed under control.
Other stocks that rallied during the day included Google's parent company Alphabet, which jumped by 8.9 percent after the company revealed that it was getting steady advertising sales. Boeing's stock prices also surged by 5.9 percent after it unveiled its new cost-cutting measures.
Facebook saw its shares surge by over 8 percent, while Microsoft and Tesla's shares gained close to 2 percent in after-market trading. Shares prices of ride-hailing firm Lyft also increased after it announced that it would be cutting its workforce by up to 17 percent.
