Tech-heavy Nasdaq Composite and S&P 500 index posted fresh all-time highs on Wednesday led by reopening and energy stocks after the FDA granted full approval for Pfizer-BioNTech’s Covid vaccine coupled with easing worries over tapering of Federal Reserve stimulus.
Investors cheered the decision by the U.S. Food and Drug Administration to grant full approval to the COVID-19 vaccine developed by Pfizer and BioNTech on Monday.
This a crucial decision by FDA, since it could encourage more unvaccinated Americans to get the mRNA vaccine which was on the U.S. market under an Emergency Use Authorization, granted back in December 2020.
The decision could also give psychological confidence to more companies, schools, and universities to adopt employee and student-led vaccine mandates during the last quarter of the year.
The approval from the U.S Federal regulator could also boost global vaccinations, necessary to contain the spread of the highly contagious “Delta” coronavirus variant around the world, which would eventually improve the global economic outlook.
According to CNBC, Pfizer and BioNTech also plan to ask the FDA to approve the third dose as a booster shot following full approval, while the Biden administration said last week that it was preparing to offer booster shots to all eligible Americans beginning the week of Sept. 20.
Market reaction:
Worries over the “Delta” variant and its impact on the global economies have eased since the start of the week, lifting companies in the energy, travel, leisure, tourism, and casinos sectors, which would benefit from the reopening of the economy after the pandemic.
As a result, the general S&P 500 index climbed to near 4,500 for the first time, while the tech-heavy Nasdaq 100 outperforms the market, reaching new record highs of 15,400. Meanwhile, the Dow Jones Industrial index rises to near 35,375, just below its records of 35,600.
Federal Reserve’s Jackson Hole Symposium:
Market participants are focusing on the coming Federal Reserve’s virtual Jackson Hole Symposium beginning on Thursday to discuss their assessment of the “Delta” variant’s impact on the US economy and labour market as its inches toward tapering stimulus.
The two-days meeting and Fed’s Chair Jerome Powell speech on Friday would be important for the financial markets since the most powerful central bank in the world could offer any clues as to when the Fed might announce and eventually begin the process of tapering its pandemic-led massive bond-buying program and to start hiking its zero-interest rates benchmarks.
