The stock market is in a sharp spin right now, as investors try to position their portfolios to make the most of what they hope will improve conditions in the global economy. This is usually bad news for the Nasdaq Compound (^IXIC -2.01%) over the past few days as market participants have seemingly shifted away from tech winners during the coronavirus pandemic and are instead investing in companies in sectors that don’t have as big an influence on the Nasdaq stock market. Even though the Dow Jones Industrials flirted with 28,000 for the first time since before the March bear market, the Nasdaq-100 and the Composite both lost ground.

That’s not to say, however, that all Nasdaq-listed stocks have done poorly. News of advances in medical science in the fight against COVID-19 helped boost travel stocks, and that included online travel specialists Reserve credits (BKNG -2.69%) and Expedia Group (EXPE -4.29%).

Why travel stock investors are optimistic

Shares of online travel stocks rose sharply on Tuesday, battling the broader Nasdaq bearish trend. Shares of Expedia soared more than 4%, while investors in Booking had to settle for gains of around half, up 2% on the day.

Travel stocks of all kinds were higher on news that the Russian government had approved a vaccine for COVID-19. Health experts in the United States and elsewhere have pointed out that the vaccine has not undergone the full list of clinical tests that would be required by the United States Food and Drug Administration and similar regulatory bodies. foreign. Early trials involved only a small number of patients, and some fear that releasing an unproven vaccine prematurely could cause dangerous side effects or prove ineffective in the fight against COVID-19.

Nonetheless, investors understand that people in general are eager to get back to normal life, and as soon as a viable vaccine becomes available, they hope to make all the trips they had to postpone during the pandemic. The harder a sector was hit at the height of the crisis, the higher its shares rose. Cruise ship stocks were among the best performers, while Airlines companies have given up a large part of their initial earnings. Hoteliers were largely mixed after rising sharply on Tuesday morning.

A low bar to overcome

Booking and Expedia have also been helped by the fact that they have set such low expectations lately. Both companies have had huge headwinds that could last at least the rest of the year, if not longer.

For example, at the end of last week, Booking Holdings released its second quarter results. Revenue fell 84% from prior year levels, leading to an 88% drop in net profit year over year. Additionally, after adjusting for extraordinary items, including gains on marketable securities, Booking’s adjusted net income was a loss of $443 million. Booked room nights fell from 213 million a year ago to just 28 million in the second quarter. Still, CEO Glenn Fogel pointed to improving trends at the end of the quarter which he hopes will help Booking gain momentum in the second half of 2020.

Expedia experienced similar pain. Revenue fell 82% in the second quarter, with a net loss of $753 million. Gross bookings fell by more than 90% on an 81% drop in nights booked. Expedia suffered a greater number of airfare cancellations than new flight bookings, resulting in negative revenue for the segment. Advertising and media sales also suffered.

For travel stocks and the broader market, much hinges on whether recent optimism bears out in reality. If all goes well, the industry could return to normal. However, if further downturns occur, gains at Expedia and Booking Holdings could give way to further declines in the second half.