Dow futures rip 700 points higher amid report Gilead drug showing effectiveness treating coronavirus

The ETF that tracks the S&P 500 rallied in after-hours trading Thursday after a report said a Gilead Sciences drug was showing effectiveness in treating the coronavirus. The move pointed to a jump for the stock market on Friday.

Around 5:35 p.m. ET, the SPDR S&P 500 ETF Trust (SPY) was up 3%. Stock futures open at 6 p.m. ET.

Gilead shares jumped by 12% after STAT news reported that a Chicago hospital treating coronavirus patients with Remdesivir in a trial were recovering rapidly from severe symptoms. The publication cited a video it obtained where the trial results were discussed.

“This is obviously good news. Of course, we’ve heard a few other pieces of good news like this recently and they didn’t pan-out as well as people had hoped,” said Matt Maley, chief market strategist at Miller Tabak, in an email. “The big question is whether it’s going to be enough to help the economy ‘re-open’ more quickly than people are thinking right now.”

“To me, the critical issue is employment,” Maley added. “If the economy can bounce back quickly enough to take the unemployment rate back into the low-single digits quickly, that’s going to be very bullish.”

Other studies have shown Remdesivir to be an effective treatment against the coronavirus. However, they have been smaller in scale.

Boeing shares also jumped about 7% after the airplane maker said it would resume production in the Seattle area as early as April 20

Stocks tumbled from record highs in February into a bear market a month later as the spread of the coronavirus roiled market sentiment and the economic outlook. 

More than 2 million cases have been confirmed worldwide, including over 650,000 in the U.S., according to Johns Hopkins University. Governments urged people to stay home, effectively shutting down the global economy. 

However, the stock market has rallied since March 23 as new coronavirus cases in the U.S. and globally showed signs of plateauing. Since then, the S&P 500 has jumped more than 25% while the Dow has gained 26.6% in that time.

Stocks also got a boost after the Federal Reserve cut rates to zero and stabilized credit markets while Congress passed a stimulus plan. 

To be sure, the outbreak has already dealt a massive blow to the economy. In four weeks, about 22 million Americans have lost their jobs. Retail sales posted last month their biggest fall on record.

Some investors have also said that news of an effective treatment or vaccine would be what would be needed for stocks to mount a sustainable comeback.

“If it is effective in keeping someone from contracting the virus or, more likely, simply reduces its severity, that would be a game changer and [would] allow the economy to restart both more quickly and more fully,” said Jim Paulsen, chief investment strategist at The Leuthold Group, about the Remdesivir trial report. 

This is breaking news. Please check back for updates.

—CNBC’s Yun Li and Pippa Stevens contributed to this report.

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