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The Dow Jones Industrial Average rose 2.59%, the S&P 500 added 3.05%, while the Nasdaq Composite gained 3.55%.
Gilead Sciences (NASDAQ:GILD) said a clinical trial evaluating its drug remdesivir in coronavirus patients had met its primary goal, sending its shares nearly 7% higher.
“The study demonstrates the potential for some patients to be treated with a 5-day regimen, which could significantly expand the number of patients who could be treated with our current supply of remdesivir,” Gilead Chief Medical Officer Merdad Parsey said in a statement.
Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said he was told data from the trial showed a “clear cut positive effect in diminishing time to recover.”
The positive news on the potential coronavirus treatment overshadowed data showing U.S. economic growth contracted at an annual rate of 4.8% in first quarter of the year.
FAANG stocks, meanwhile, clawed back some of their losses from a day earlier after Google-parent Alphabet (NASDAQ:GOOGL) reported earnings that were better than feared. Facebook (NASDAQ:FB), which is set to report after the closing bell, was up about 6%, while Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) were up more 2%.
Energy, meanwhile, also supported the broader market rally, underpinned by a jump in oil prices owing to a smaller-than-expected bid in weekly U.S. crude inventories.
The rally on Wall Street comes just an hour ahead of the Federal Reserve rate decision and a press conference from Chairman Jerome Powell.
The Fed is expected to keep rates steady, but investors will be watching for any further policy tools the central bank may roll out in a bid to avert a prolonged recession.
Many have attributed the central bank’s efforts to prop up the economy to the recent surge in the broader market since the March 23 low.
On the earnings front, meanwhile, investors digested mixed quarterly results from corporates.
General Electric (NYSE:GE) was flat after reported quarterly revenue above forecasts, but earnings of 5 cents per share missed estimates of 8 cents a share.
Toymaker Hasbro (NASDAQ:HAS) reported quarterly results that just missed Wall Street estimates and warned it expected the coronavirus to hurt its sales of its toys and games in the second quarter.
Yum! Brands (NYSE:YUM) was down 0.7% after its reported that earnings plunged 68% from a year earlier, with same-store sales down 7% during the quarter as the Covid-19 pandemic forced many restaurants to shutter.
