U.S. stocks rose on Monday as investors cheered what appeared to be improvements in President Donald Trump’s health as well as rising optimism for further fiscal stimulus.
The Dow Jones Industrial Average climbed 350 points, or 1.3%. The S&P 500 also rose 1.3%, while the Nasdaq Composite gained 1.7%.
Monday’s gains came amid the prospect that Trump may be discharged from the hospital later in the day, which would ease uncertainty about his Covid-19 prognosis and the functioning of the government during the already-chaotic election season.
White House chief of staff Mark Meadows told NBC News Monday that, “The discharge decision will be made later today between the president and his medical team.”
In a minute-long video posted on Twitter late Sunday, Trump said that “we are getting great reports from the doctors.” The president also took a short motorcade ride to wave to his supporters standing outside the hospital. Early Monday morning, Trump fired off a series of tweets urging Americans to vote for him, citing the “biggest tax cut ever” and “stock market highs.”
He was transferred to Walter Reed National Military Medical Center on Friday after he was given the antiviral drug remdesivir. Trump’s physician, Dr. Sean Conley, said Sunday that his condition has improved and the president may be discharged as soon as Monday.
Wall Street had been more concerned after his doctors said Sunday they had begun treating him with dexamethasone, a steroid recommended for severe cases of Covid-19. The president was said to have experienced two drops in his oxygen levels since his diagnosis announcement just before 1 a.m. ET on Friday.
CNBC’s Jim Cramer said Monday’s rally is driven by hopes for a new stimulus deal.
“I think this is more stimulus. I really do,” Cramer said on CNBC’s “Squawk on the Street” on Monday. “This is hope on talks between Secretary Mnuchin and Speaker Pelosi that may be going on now.”
Trump’s illness, as well as a weak September jobs report, highlighted the urgency for further coronavirus aid after a months-long stalemate in Washington.
Optimism for reaching a compromise rose over the weekend after House Speaker Nancy Pelosi, D-Calif., signaled progress on Friday, saying “we continue to work on the text to move quickly to facilitate an agreement.”
Pelosi on Friday called on the airline industry to delay furloughs, saying additional relief for the industry is “imminent.”
The president also put pressure on Congress over the weekend to get a deal done, saying in a tweet that lawmakers should “WORK TOGETHER AND GET IT DONE.”
Biden leading
After Trump’s diagnosis, former Vice President Joe Biden opened his widest lead in a month in the presidential race with 51% of those polled backing him and 41% saying they would vote for Trump, according to a Reuters/Ipsos poll released on Sunday from October 2-3.
A win for the former vice president in November could spell headaches for Wall Street in the form of higher taxes and tighter regulations, but some also say it could lead to a bigger fiscal stimulus deal that would be good for stocks.
At the same time, a convincing win could ease concerns about a drawn-out or contested election result.
“Markets seem (to) have lowered the chance of prolonged uncertainty post-November 3,” wrote Ajay Rajadhyaksha, head of macro research at Barclays. “Given that Vice President Biden has been ahead in most polls, this suggests that markets are assigning a bit more probability to his win and a bit less to a close and contested outcome.”
Trump’s sickened condition also emphasized the gravity of the pandemic that is still roiling major states and cities in the country. New York City Mayor Bill de Blasio announced Sunday that nine ZIP codes in Brooklyn and Queens will most likely shut down on Wednesday due to a recent spike in new cases.
Despite Trump’s diagnosis, major averages all eked out modest gains last week. The S&P 500 climbed 1.5% for its first positive week in five.
— CNBC’s Thomas Franck contributed reporting.
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