Dow climbs 400 points as COVID-19 drug hopes outweigh economic pain

• US equities soared on Wednesday as traders gained new hope from a successful coronavirus drug trial.
• Gilead announced Wednesday morning its remdesivir compound succeeded in a key trial. Additional information on the study will be released later in the day.
• Investors' optimism toward the positive drug news overshadowed a 4.8% contraction in US GDP through the first quarter. Economists expected the metric to slide 3.8%, according to Bloomberg data.
• Watch major indexes update live here.

US stock indexes gained on Wednesday as traders shrugged off dismal economic data and instead focused on promising drug trial news out of Gilead.

The biotech firm revealed its leading coronavirus drug remdesivir succeeded in a key study, saying "the trial has met its primary endpoint." Additional information on the drug's performance is set to be revealed later in the day at a briefing. Markets have previously soared on such news as investors wait for a viable option to combat the coronavirus.

Gilead shares surged as much as 11% following the report's release. Trading was initially halted on the news.

Here's where major US indexes stood at 9:35 a.m. ET on Wednesday:

• S&P 500: 2,916.74, up 1.9%
• Dow Jones industrial average: 24,500.77., up 1.7% (399 points)
• Nasdaq composite: 8,791.17, up 2.1%

Read more: An expert tech investor beating 97% of his peers reveals the most important trends in his portfolio — and breaks out his top 3 stock picks for the next decade

The optimistic biotech news largely overshadowed dire updates to the nation's economic situation. US gross domestic product contracted by 4.8% in the first quarter, its worst decline since the financial crisis. Economists expected the metric to slide by 3.8%, according to Bloomberg data. The update officially ended the US's longest-ever economic expansion.

Wall Street is also looking to the Federal Reserve for any hints at how the US economic recovery may play out. The Federal Open Market Committee wraps up two days of meetings on Wednesday and may issue fresh guidance on the central bank's policy playbook.

Alphabet's post-earnings bounce further lifted indexes. The Google parent soared as much as 8% in early trading after revenue bested expectations. While CEO Sundar Pichai warned of a drastic slowdown in advertising sales, he praised YouTube and Google Cloud's revenue growth through the chaotic first quarter.

Oil retraced some losses posted earlier in the week, leaping 18% to $14.57 per barrel on Wednesday. Brent crude leaped 5% to $23.39 per barrel. The gains follow the American Petroleum Institute reportedly saying oil inventories increased by nearly 10 million barrels last week, falling below analysts' 12 million barrel estimate. The statement suggests storage demand may be waning after last week's market meltdown.

Earnings reports from Facebook, Tesla, and Microsoft are slated for release after the market close.

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