Wall Street surged Monday, propelling all three major indices to record highs after Pfizer said its vaccine was 90 percent effective in protecting people against Covid-19.
U.S.-based pharmaceutical giant Pfizer and the German biotech company BioNTech made the announcement Monday morning, citing data from their late-stage vaccine trial.
"This is a game changer," Albert Bourla, Pfizer's chairman and chief executive, told CNBC on Monday morning. He wrote in an official statement, "Today is a great day for science and humanity."
The Dow Jones Industrial Average ended the day with a gain of around 835 points, having soared by more than 1,700 points earlier in the trading session. The S&P 500 closed up by 1.2 percent after it rallied to a record high. The tech-heavy Nasdaq composite index, which also touched record levels, closed the day's session in the red, down by 1.6 percent as stay-at-home stocks fell out of favor.
Shares in travel and hospitality had huge gains all day after the Pfizer announcement on hopes that a return to normality would elevate passenger demand and visitor numbers. The casino operator MGM Resorts and Delta Air Lines both surged by 18 percent, and Royal Caribbean cruise lines soared by 25 percent.
High-growth tech stocks took the biggest hit Monday, as sectors that have benefited from the pandemic became hot potatoes. Shares in the videoconferencing company Zoom plunged by almost 20 percent.
The tech sector prospered throughout coronavirus-induced lockdowns, with stocks such as Amazon surging by close to 100 percent since the beginning of the pandemic and Netflix's market capitalization growing by around $100 billion.
Monday's rally, the biggest since February, built on post-election gains, which came as former Vice President Joe Biden emerged Saturday as victor in the presidential race, according to NBC News Decision Desk projections.
With Election Day stretching for five days with no outcome, Americans — and markets — had been anxiously awaiting to find out whether Biden or President Donald Trump would win. Biden became president-elect Saturday after winning the pivotal state of Pennsylvania. NBC News called the race in Pennsylvania for Biden at 11:24 a.m. ET, bringing Biden's Electoral College vote total to 273 and allowing the network to call the election for him.
Trump has refused to concede, vowing to press forward with a legal fight and pushing unfounded claims of voter fraud.
Investors have already begun to reposition their portfolios to reflect the potential reality of a divided government, with no "blue wave" that would have put Democrats in control of both chambers of Congress.
With legislative power likely to be more balanced, traders wagered that restrictive measures, such as tighter regulation and higher taxes, would be unlikely to pass.