U.S. stocks, crude jump on revived stimulus hopes, Trump's improving health

NEW YORK (Reuters) - U.S. stocks closed sharply higher and crude prices surged Monday as renewed optimism surrounding stimulus negotiations and news of President Donald Trump’s health progress helped calm investor anxiety.

U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued talks toward a bipartisan agreement on a new pandemic relief package. That revived hopes for a new round of stimulus more than two months after emergency unemployment benefits expired for millions of Americans.

“This probably is a bit of a relief rally,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “Two weeks ago there wasn’t much hope and now there’s a growing consensus that stimulus could pass before the election.”

“That seems to be where the market is leaning right now.”

Trump’s physician, Dr. Sean Conley, announced late in the session that the president has met or exceeded all standard criteria to be discharged following hospitalization for treatment of COVID-19.

“The markets don’t like uncertainty and there seems to be more clarity today on the president’s health,” Carlson added.

Democratic contender Joe Biden opened his widest lead in a month in the U.S. presidential race, according to a Reuters/Ipsos poll released on Sunday.

FILE PHOTO: The New York Stock Exchange is pictured in the Manhattan borough of New York City, New York, U.S., October 2, 2020. REUTERS/Carlo Allegri/File Photo

The Dow Jones Industrial Average .DJI rose 465.83 points, or 1.68%, to 28,148.64, the S&P 500 .SPX gained 60.18 points, or 1.80%, to 3,408.62 and the Nasdaq Composite .IXIC added 257.47 points, or 2.32%, to 11,332.49.

Positive updates regarding Trump’s health and a flurry of dealmaking activity helped European shares close at a two-week high.

The pan-European STOXX 600 index .STOXX rose 0.81% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 1.64%.

Crude prices surged on waning uncertainties, and were further supported by an escalating oil workers strike in Norway, where six offshore oil and gas fields were shut down.

U.S. crude CLcv1 futures settled at $39.22 per barrel, a 5.86% gain. Brent crude advanced 5.14% to settle at $41.29 per barrel.

The safe-haven dollar dipped and riskier currencies outperformed on mounting stimulus optimism.

The dollar index .DXY fell 0.4%, with the euro EUR= up 0.58% to $1.1784.

The Japanese yen weakened 0.41% versus the greenback at 105.78 per dollar, while sterling GBP= was last trading at $1.2982, up 0.39% on the day.

Risk-on sentiment also pushed longer-term U.S. Treasury yields to five-year highs and the yield curve steepened to its widest since late August.

Benchmark 10-year notes US10YT=RR last fell 25/32 in price to yield 0.7751%, from 0.694% late on Friday.

The 30-year bond US30YT=RR last fell 76/32 in price to yield 1.5804%, from 1.48% late on Friday.

Gold inched higher as the dollar slipped, despite gains in equities markets.

Spot gold XAU= added 0.7% to $1,911.58 an ounce.

Reporting by Stephen Culp; additional reporting by Danilo Masoni in Milan; Editing by David Gregorio