Investors didn't waste any time getting into the summer-holiday spirit on Wall Street, as Monday featured a solid gain even in the face of rising uncertainty.

COVID-19 cases have spiked higher in the U.S., and some fear that a failure to contain the outbreak could lead to renewed measures like business closures. Nevertheless, market participants focused on more positive news, sending the Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite higher.

Today's stock market


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Data source: Yahoo! Finance.

Among top performers in the market Monday were airline stocks. Even though they've been quite sensitive to coronavirus-related news, the optimism that pushed the broader market higher also helped lift their prospects. Moreover, good news from Boeing (NYSE:BA) could be signaling the end of at least one painful chapter for the industry.

How airlines fared

Among major carriers, Southwest Airlines (NYSE:LUV) led the way higher with gains of nearly 10%. American Airlines Group (NASDAQ:AAL) wasn't far behind with an 8% rise, and United Airlines Holdings (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL) followed suit with gains of 7% and 6% respectively.

Southwest in particular benefited from favorable comments from analysts at Goldman Sachs. The Wall Street giant upgraded its view on Southwest from "sell" all the way to "buy," and it boosted its price target by $12 per share to $47. Goldman's view on the industry is mixed, with the analysts now expecting it'll take until 2023 for a full return to pre-coronavirus conditions for airlines. Yet Southwest has a strong balance sheet, and its emphasis on domestic travel gives it a competitive advantage over the more internationally focused American, Delta, and United. There, international travel restrictions could last longer, extending the period for a recovery.

More broadly, investors like what they're seeing fundamentally. Traffic numbers continue to rise, and that has many hopeful that load factors will follow suit. Some carriers have even started to relax their previous anti-coronavirus measures, no longer requiring that middle seats remain empty. American expects to book full flights as soon as July 1, and United is also intending to start seating three to a side soon.

White 737 Max 8 aircraft on an airport taxiway, holding short of an ILS marker

Image source: Boeing.

MAX flight

Airlines might also have gotten a lift from favorable news from Boeing, whose shares soared 14%. The aerospace manufacturer got approval to begin test flights of the long-grounded 737 MAX aircraft, with its first flight toward certification having occurred earlier today.

From Boeing's perspective, the benefits of having the MAX flying are obvious. What's less clear, though, is how much demand there'll be from major air carriers. Airlines have grounded huge portions of their existing fleets during the coronavirus crisis, and it'll take significant increases in passenger traffic just to return to full capacity based on existing holdings.

Those airlines that are in financial condition to take delivery might still choose to do so. Efficiency gains and other benefits prompted high demand for the 737 MAX before multiple accidents forced its grounding. Yet with airlines facing major financial pressures, it's dangerous to assume that all deliveries will still take place as previously expected.

Airlines looked healthier today, and conditions seem to be improving. But there's still plenty of uncertainty affecting airline stocks, and investors need to be ready for a bumpy ride ahead.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.