(Bloomberg) — U.S. equities followed global stocks higher on optimism over economic stimulus and that President Donald Trump may soon leave the hospital. Treasury yields rose and the dollar weakened.
The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all rebounded from Friday’s swoon in the wake of Trump’s coronavirus disclosure. Regeneron Pharmaceuticals Inc. rallied after Trump was given an experimental antibody treatment made by the drugmaker. Apple Inc., Tesla Inc. and Microsoft Corp. also rose.
“Fiscal stimulus continues to be a wild card for the market, and uncertainty around the health of the president certainly looms large,” said Chris Larkin, managing director of trading and investment product at E*Trade Financial Corp. “So while there’s a lot of noise out there, experienced traders may find bullish opportunities.”
Consumer companies and banks led a broad advance among European stocks. Equities in Asia notched gains, while crude oil rebounded from a three-week low.
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A member of Trump’s medical team said Sunday that the president could be released from hospital as soon as Monday after treatment for Covid-19. But Trump’s condition remains clouded by confusion, with the president’s effort to show strength contradicted by conflicting accounts from his doctors.
“As for news around Trump, it will likely continue to cause extra volatility,” said Robert Greil, chief strategist at Merck Finck Privatbankiers AG. “I think this week clear progress or a deal on the next U.S. fiscal program would boost risk appetite the most.”
On the stimulus front, Trump tweeted from the hospital that a deal needs to get done. House Speaker Nancy Pelosi was optimistic on Friday that a bipartisan stimulus bill can be done, and said his diagnosis “kind of changes the dynamic.”
Traders also pointed to polls suggesting a stronger lead for Democrat Joe Biden and the possibility that a clear winner will emerge from the Nov. 3 election. U.S. markets have been nervous in recent weeks about a close election and the risk of a long and messy legal battle.
“Polls are shifting from a close election and prolonged uncertainty to more a dominant Biden and clean succession,” said Peter Rosenstreich, head of market strategy at Swissquote Bank SA. “That is reducing uncertainty and increasing risk appetite.”
Elsewhere in markets, the Taiwan dollar closed at the strongest level since 2011 amid speculation the local central bank will loosen its grip on the rallying currency.
In European stocks, Cineworld Group Plc plunged in London after saying it would suspend operations at all its U.S. and U.K. theaters. Weir Group Plc jumped after announcing the sales of its oil and gas division to Caterpillar Inc.
Here are some key events coming up:
The Reserve Bank of Australia is forecast to keep interest rates and its three-year yield target unchanged at 0.25% on TuesdayAlso Tuesday, Fed Chair Jerome Powell and ECB Chief Economist Philip Lane deliver keynote addresses at the NABE conferenceOn Wednesday, the minutes of the Sept. 15-16 meeting of the FOMC could be especially fruitful for Fed watchers, beginning with details of the debate on conditions necessary to trigger a rate increaseThe U.S. Vice Presidential debate takes place in Salt Lake City on WednesdayThough the final formal round of talks is over, the British government expects trade negotiations to continue up to the EU summit in mid-October.
These are the main moves in markets:
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