Vaccine News Boosts Stock Market, but Possibilities of New Shutdowns Quell Enthusiasm

By Thomas Price Wednesday, November 18, 2020

The news of not one but two potential vaccines for COVID-19 showing tremendous viability in clinical trials has the stock market certainly taking notice after the virus has kept the world’s economy in the stranglehold. After the Pfizer vaccine announcement earlier in November, and soon after the Moderna vaccine in mid-November, the stock market saw major boosts, both overall and then in particular for travel-based companies, as well as the companies behind the vaccines. While this surge from the stock market is exciting, recent developments surrounding the pandemic’s rise in cases and new restrictions have pulled back some of the gains.

Rallies After Pfizer and Moderna News

After Pfizer announced the results of their clinical trials showing 90% effectiveness in their vaccine, the stock market showed genuine enthusiasm. While the news was sure to boost Pfizer and BioNTech’s stocks, which saw a 10% and 13% bump, respectively, it also gave a major spike to travel and entertainment companies. For companies like AMC Entertainment Holdings and Carnival, who have each had extremely difficult years, the Pfizer news provided major lifts to each of their stocks. AMC’s stock shares jumped an insane 48% in a single day after the news broke, with hopes of possible widescale reopenings being near in the future. Carnival also was subject to major stock boosts, with their shares rising by an impressive 32%. Similar sorts of widespread rallies were also seen after Moderna released their own clinical trial results.

After Moderna’s news that their own vaccine was 94.5% effective, the stock market saw gains nearly across the board. For the Dow Jones Industrial Average, a solid 470 points were added, which translates to a 1.6% bump, nearly reaching 30,000. For Moderna, the company watched their own shares rocket up 9.6% on the back of the good news. Once again, travel and entertainment were also big winners on the day, with Carnival again seeing huge jumps, this time spiking up their share price 9.7%. Across American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines, stock rallies all fell between 3.9% and 5.2%. Despite the good news, the rally was not to be sustained as the stock market shrank amid COVID-19 lockdowns and re-emerging restrictions.

Slight Stock Pullbacks

After two solid rallies in November thanks to genuinely groundbreaking vaccine news, much of the reality of the current economic situation combined with the current state of the COVID-19 pandemic set in once again. After posting record closing highs the previous day due to the Moderna results, both the Dow Jones and the S&P 500 diminished from their previous numbers. With new COVID-19 related restrictions being implemented in California and Michigan announcing a partial lockdown for at least three weeks, short term futures for the stock market and economy looks set to retract again after steady growth due to economic reopenings and recovery. While this may be disheartening, most analysts predict a longer, more sustained rally coming in 2021 as the vaccination process begins to take place in full, and large scale recovery can begin in earnest. Especially with vaccine distribution for the general population set to take place in the spring or summer, there is serious belief in long-term recovery coming sooner rather than later.

Final Conclusions

The stock market has been slightly reactionary on major news, especially regarding the COVID-19 pandemic. Both rallies eventually petered out as markets self-corrected slightly, with much of the news of where the nation stands on the pandemic still being more dire than positive. With that being said, the vaccine news, in particular, is still extremely good. While the immediate spikes may not necessarily indicate the current market trends, it is far more indicative of what might be the case in 2021, especially as the vaccine begins to roll out globally.

About the Author

Headshot for author Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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