By Yasin Ebrahim
Investing.com – Wall Street climbed on Tuesday, led by energy as oil prices surged on hopes the gradual reopening of the economy will kickstart crude demand.
The Dow Jones Industrial Average gained 1.38%, the S&P 500 rose 1.58%, while the Nasdaq Composite jumped 1.81%.
Oil prices surged 20%, sending energy stocks sharply higher as major oil producers cut supply and the U.S. and Europe begin to ease Covid-19 lockdown measures that had hampered economic activity for several weeks.
Goldman Sachs (NYSE:GS) raised its estimate for WTI Crude prices in 2021 to $51.38 per barrel from $48.50 on expectations that oil output cuts and the reopening of economies would ease the glut in supply.
“Oil production has started to decline quickly from a combination of scaleback in activity, shut-ins and core-OPEC/Russia production cuts,” Goldman Sachs Equity Research said, according to Reuters.
"Demand is also beginning to recover from a low base, led by a restarting Chinese economy and inflecting transportation demand in developed market economies,” Goldman added.
Healthcare stocks, meanwhile, also led the broader market higher as investors digested positive news on the drugmakers' efforts to produce a coronavirus vaccine.
Pfizer (NYSE:PFE) was up nearly 3% after announcing it had begun testing a potential coronavirus vaccine in the United States.
Regeneron Pharmaceuticals (NASDAQ:REGN) rallied 6% after reporting earnings that topped consensus estimates.
The healthcare company also said it was on track to begin human trials of its experimental coronavirus antibody cocktail in June.
Technology built on its positive start to the week, as chip stocks and FAANG names, with the exception of Netflix (NASDAQ:NFLX), catching a strong bid.
Apple (NASDAQ:AAPL) confirmed it will host its annual worldwide developers conference virtually, beginning June 22.
In consumer discretionary, Starbucks (NASDAQ:SBUX) rose 2% after announcing it will reopen 85% of its stores, albeit with limited operations and hours. Drive-thru, app orders and Uber Eats will be allowed.