US stocks have ended sharply higher, with the S&P 500 at its highest since early June, following promising early data for a potential COVID-19 vaccine and a strong quarterly report from Goldman Sachs.

Moderna rallied 6.9 per cent after a small-scale study showed its experimental COVID-19 vaccine produced high levels of virus-killing antibodies.

Travel-related stocks Carnival, Royal Caribbean Cruises, Marriott International and Wynn Resorts surged between seven per cent and 21 per cent, and the S&P 1500 airlines index rallied over 10 per cent.

The S&P 500 beat the technology-heavy Nasdaq Composite for a fourth straight session, a feat scored only twice since Wall Street launched its massive recovery last March.

Gains for the Nasdaq were capped by online retail giant Amazon, video streaming platform Netflix and Microsoft, which slipped on Wednesday after surging to record highs recently.

Tim Ghriskey, chief investment strategist at Inverness Counsel in New York, said news of a potential vaccine had given investors hope.

“The Moderna news woke everybody up again that this is not going to last forever, and there is light at the end of the tunnel. That is why you are seeing such a strong move today into those economically sensitive stocks,” he said.

Adding to investors’ enthusiasm, the Federal Reserve’s Beige Book survey showed US businesses saw an uptick in activity into the beginning of July as states eased restrictions to contain the novel coronavirus pandemic.

A raft of stimulus measures and encouraging economic data have lifted the S&P 500 to about five per cent below its record high hit in February.

However, the US has failed to control the coronavirus and there is a high level of uncertainty over how much the pandemic will affect the economy, Philadelphia Federal Reserve Bank President Patrick Harker said, as a number of US sunbelt states reported a surge in COVID-19 cases recently.

Near the end of Wednesday’s trading session, US President Donald Trump said his administration had completed a top-to-bottom overhaul of the infrastructure approval process.

The Dow Jones Industrial Average rose 0.85 per cent to end at 26,870.03 points, while the S&P 500 gained 0.91 per cent to 3,226.55.

The Nasdaq Composite climbed 0.59 per cent to 10,550.49.

Goldman Sachs rose 1.4 per cent after it said its trading revenue doubled in the second quarter, driven by big swings in stock and bond markets since March.

Morgan Stanley and Bank of America gained nearly two per cent ahead of their results on Thursday. The broader banking index climbed 2.9 per cent.

UnitedHealth fell 1.4 per cent after warning of rising costs later this year as Americans catch up on less urgent surgeries halted by the coronavirus pandemic.

Advancing issues outnumbered declining ones on the NYSE by a 5.23-to-1 ratio; on Nasdaq, a 4.31-to-1 ratio favoured advancers.

The S&P 500 posted 31 new 52-week highs and no new lows; the Nasdaq Composite recorded 78 new highs and three new lows.

Volume on US exchanges was 11.0 billion shares, compared with the 11.7 billion average for the full session over the last 20 trading days.