By Yasin Ebrahim

Investing.com – The S&P 500 rose sharply on Friday, as positive vaccine news prompted investors to renew their bullish bets on stocks following a sloppy September.

The Nasdaq gained 0.5%, while the Dow rose 1.3% or 450 points.

Merck & Company Inc (NYSE:) reported that its experimental Covid-19 pills cut the risk of death and hospitalization by 50% in a study, sending its share price more than 9% higher.

In spite of ongoing Delta-related effects, the positive news about Covid-19 treatment has fueled investor optimism for the recovery.

With the rise of energy and material stocks as well as cyclical stocks leading, there are high expectations that energy will keep rising to at least $100 per year.

“If all these factors come together, oil prices could spike and lead to a second round of inflationary pressures around the world,” Bank of American said in a note.

Exxon Mobil (NYSE:) rose 2% following an increase in its forecast for third-quarter earnings. The company cited higher oil and natural gas prices as the reason. Higher oil prices could increase earnings by up to $1.5billion, according to the major oil company.

Bets on reopening stocks – those that benefit from easing pandemic restrictions – renewed, with cruise and airlines companies leading the way.

United Airlines Holdings (NASDAQ:), American Airlines Group (NASDAQ:NASDAQ? ), Carnival (NYSE 🙂 (NYSE :CCL ) and Norwegian Cruises (NYSE :NCLH ) were both significantly higher.

The rise in interest rates has caused big tech to trade mixed. Amazon and Apple were weighed down with concerns over supply-chain disruptions.  

Apple (NASDAQ) and an dAmazon.com.com (NASDAQ) were both in red while Alphabet (NASDAQ) and Microsoft (NASDAQ) were higher.

The economy is experiencing a faster rate of inflation, with little indication of slowing down. However, consumers, who make up around two-thirds the economy continue to spend.

Inflation measure preferred by the Federal Reserve, personal consumption expenditures price index (PCE), excluding food, for the twelve months to September.

From a 0.1% decrease in June, July’s consumer spending rose 0.8%.

“We remain constructive on consumer spending in the coming quarters. Even as the impulse from fiscal stimulus targeted at households fades, labor market  income and a savings cushion should support continued spending,” Morgan Stanley (NYSE:)

Meanwhile, Nancy Pelosi, the House Speaker, was forced by ongoing Democratic caucus wrangling to postpone a vote on the $1 Trillion bipartisan infrastructure package.

In a bi-track strategy, both the bipartisan Infrastructure Package and $3.5 Trillion reconciliation bill were to be passed simultaneously by the House.

However, Sen. Joe Manchin stated that he supports a reconciliation package of $1.5 trillion. This is far less than the $3.5 trillion proposed.