Stocks climb to all-time high on vaccine progress

Global stocks surged to an all-time high, Treasuries fell, and the dollar weakened after Pfizer Inc. said that its Covid-19 vaccine prevented more than 90% of infections in a large-scale study.

The announcement delivers the clearest sign yet that scientists are making progress in developing a vaccine that could end the pandemic. Investors responded by piling into risk assets, and dumping havens.

Futures on the S&P 500 jumped 3.6%, and contracts on the Russell 2000 Index of small-cap stocks surged 7%. The tech-heavy Nasdaq 100 Index pared gains but was still up 0.8%.
The preliminary results on the vaccine pave the way for the companies to seek an emergency-use authorization from regulators if further research shows the shot is also safe.

Pfizer shares extended gains in premarket trading, rising about 7%. American depositary receipts for BioNTech, which is also developing the vaccine, were up about 11%.

The announcement heaped fuel on a rally that’s been running for the past week after the U.S. election. Markets have cheered Joe Biden’s win for the presidency and speculated that it would usher in a better trade relationship with China and another economic stimulus package.

There’s precedence for the market’s gains to continue. Since 2000, every time the S&P 500 was higher heading into Election Day, November and December came in green, too. The first years of presidential terms have also been good ones of late. Since 1986, according to Leuthold Group data, they’ve seen average gains of 18.6%.