The Food and Drug Administration’s decision Monday to grant full approval to Pfizer-BioNTech’s two-dose Covid-19 vaccine pushed markets higher, boosting the Dow Jones Industrial Average by 300 points and propelling the S&P 500 and the Nasdaq to new highs. Investors appeared to express confidence that the move could be an inflection point for the economic recovery.
The boost could reflect expectations that full approval will increase vaccination rates in two ways: more vaccination requirements by businesses and governments and greater acceptance from the public.
President Joe Biden pressed private companies Monday to mandate vaccinations, saying in a news briefing: “I’m calling on more companies in the private sector to step up the vaccine requirements that will reach millions of more people. If you’re a business leader, a nonprofit leader, state or local leader who has been waiting for full FDA approval to require vaccinations, I call on you now to do that, require it.”
Some employers have already taken the approval as a green light for mandates. The New York City public school system — the country’s largest — announced that all staff members must have at least one shot of the two-shot regimen completed by Sept. 27, and the Defense Department announced that all 1.4 million active-duty military members will be required to be vaccinated.
Some private-sector companies, such as United Airlines, Tyson Foods, Walmart, and the Walt Disney Co., had already required vaccinations for some or all employees.
“I think some companies and state and local governments will all be feeling more comfortable in issuing vaccine mandates,” said Eric Diton, president and managing director of The Wealth Alliance, an investment advisory firm. “All of that is going to contribute to a higher vaccination percentage, which means a reduced impact of Covid and the delta variant, which should ultimately lead to a strengthening of the economy.”
Vaccine skeptics could be increasingly isolated as more employers embrace mandates. The dismissal of a Texas court case and guidance from the Justice Department had already emboldened more employers to mandate vaccinations, said Michael Schmidt, office managing partner and vice chair of the labor and employment department at the law firm Cozen O’Connor.
The approval Monday will accelerate that momentum, he said.
“For those employers who were still waiting for that issue to resolve itself, I think they’ll be more likely to implement mandatory vaccine policies,” he said.
The approval also paves the way for companies or organizations to require customers to be vaccinated. In particular, the stricken leisure and hospitality sector could benefit if Americans are more willing to travel, dine out, visit theme parks and attend in-person events, said Tuna Amobi, the senior consumer analyst at CFRA Research.
“The travel and leisure industry is highly correlated to consumer sentiment and the perception of safety,” he said. “It will all depend on the perception of the consumer, the consumer’s willingness to spend and willingness to travel.”
As caseloads have surged recently because of the highly transmissible delta variant of the coronavirus, the economic recovery many had expected at the beginning of the summer seemed to be growing more elusive.
“Up until really recently, the consumer has been a bright spot in the economy,” Diton said. “The consumer wants to spend.”