Wall Street Jumps on Coronavirus Drug Hopes; Fed in Focus

U.S. stocks jumped to seven-week highs on Wednesday as Gilead Sciences gave an encouraging update on a potential COVID-19 treatment and upbeat earnings from Google-parent Alphabet boosted the so-called market-leading FAANG stocks.

Gilead <GILD.O> rose 7% after the drugmaker said its experimental antiviral treatment remdesivir helped improve symptoms for COVID-19 patients who were given the drug early.

“Optimism is growing that remdesivir will get fast track approval, but traders need to exercise some caution as it has yet to be proven safe nor effective in treating COVID-19,” said Edward Moya, senior market analyst at OANDA in New York.

The three main indexes have recovered over 30% from their mid-March lows, boosted by aggressive stimulus efforts and, more recently, on hopes of an economic revival as many U.S. states begin to relax lockdown measures.

Supporting markets further was Alphabet Inc’s <GOOGL.O> 8.6% surge as its quarterly report showed a drop in Google ad sales steadied in April.

Alphabet’s results helped growth stocks such as Facebook Inc <FB.O>, Apple Inc <AAPL.O>, Amazon.com Inc <AMZN.O> and Netflix Inc <NFLX.O>, gain between 1% and 6.5%.

The S&P 500 communication services sector index <.SPLRCL> jumped 5%.

Boeing Co <BA.N> shares jumped 9.4% after the planemaker said it would cut its workforce by about 10%, reduce 787 Dreamliner production and try to boost liquidity.

All eyes will be on the policy statement by the Federal Reserve at the end of its two-day meeting at 2 p.m. EDT (1800 GMT).

“They are going to be broadly supportive of the markets, the 💰Economy and signal a continuing commitment to further ramp up interventions if necessary, to support the recovery,” said Tony Roth, chief investment officer at Wilmington Trust in Wilmington, Delaware.