S&P 500 darts to fresh all time highs as risk sentiment recovers

US stocks are flying high once again as risk sentiment improves in a dovetail fashion. Both FDA vaccine approvals as well as dialled down expectations of a Federal Reserve taper announcement have lifted spirits on Wall Street.

At the time of writing, the Dow Jones Industrial Average has climbed 0.7% to 35,380.85, with the S&P 500 up 0.27% and Nasdaq higher by 1.57%. Energy, communication services, and financials have been leading gainers while the utilities sector has been the steepest decliner.

Things kicked off on the bid following Friday's reaction to Dallas Federal Reserve President Robert Kaplan's comments.

Kaplan who has been among the US central bank's most forceful supporters for starting to reduce support for the economy said on Friday that he may need to adjust that view if the Delta variant of the coronavirus slows economic growth materially.

His comets have helped the market to second guess this Friday's highly anticipated Jackson Hole whereby the Fed's chairman, Jerome `Powell, is speaking. 

Powell has been expected to make an announcement over the timings of a tapering of the central bank's asset purchases. 

The event evokes the "Taper Tantrum" of 2013, when interest rates spiked higher and share prices tanked in reaction to then-Fed chair Ben Bernanke discussing its bond-buying program.

However, investors are less concerned about this week's event whereas Wall Street had otherwise been on high alert to the prospects of tighter money conditions and an announcement there of sooner than later. 

Meanwhile, the markets have also been given a shot in the arm as investors digest the announcements of full FDA approval of a COVID-19 vaccine.

The US Food and Drug Administration (FDA) granted full approval to the COVID-19 vaccine developed by Pfizer Inc PFEand BioNTech SE BNTX in a move that could accelerate inoculations in the United States.

This will be expected to raise the number of vaccinations as per population given that it will help to remove scepticism over the vaccination which opens the door to more mandates. 

Pfizer and U.S.-listed shares of BioNTech were up 2.7% and 8.3%, respectively.

Rival Moderna Inc MRNA gained 5.9%.

S&P 500 technical analysis

Following the strong bullish candle formation printed last week, as eclipsed in the chart above, the market has gone on to rally to fresh highs.

More of the same can be expected for the days ahead so long as the old highs hold as support.