The recovery is underway in some places. How strong is it?

See here: The S&P 500 finished 1.2% higher on Tuesday and is now within striking distance of 3,000 points. The index has been below that level since early March.

High frequency data supports the idea that a recovery is underway as the United States, Europe and Japan begin the gradual process of reopening, according to economists at Morgan Stanley.

Demand for power in Italy is now at 88% compared to average levels between 2017 and 2019, while US credit card transactions are back where they were a year ago following weeks of steep declines, the investment bank said in a recent note to clients.

Bespoke Investment Group, meanwhile, noted recent improvements in the Dallas Fed Social Distancing Index, which uses US mobile phone data to track how many people leave home, how far they travel and time spent away.

Though social distancing differs dramatically by location, Bespoke observed Tuesday that the index has been declining steadily for the past month and a half. That indicates more people are out and about.

China, the first in and the first out of lockdown, continues to push ahead. Consumer behavior and industrial activity keep improving, according to Morgan Stanley, with fewer people indicating they intend to cut future expenses and more people signaling they'd be willing to leave the house for non-essential trips.

Such data is feeding the positive market mood as investors eye corporate earnings six months to a year down the line.

"Bulls remain on parade," Stephen Innes, global markets strategist at AxiCorp, told clients Wednesday.

But the risk of a second wave of infections has not receded, and the situation in some parts of the world is getting worse. Brazil now has the second highest number of cases globally.

An improvement in activity is also very different from a return to normalcy. Per the Dallas Fed Social Distancing Index, more than half of the total social distancing impact is still in place, according to Bespoke.

The EU is divided over Covid-19 aid. That could tear it apart

A fight over how to fund the European Union's recovery from the coronavirus pandemic is stoking tensions between wealthier and poorer countries. That threatens to delay the region's economic rebound, and unleash political and financial forces that could pull the bloc apart.

The latest: European Commission President Ursula von der Leyen is due Wednesday to unveil her proposal for digging Europe out of a historic recession alongside plans for a long-term EU budget. But deep divisions between member states still need to be bridged, raising the risk that urgently needed relief could be held up.

Over the weekend, a group of fiscally conservative nations known as the "Frugal Four" — Austria, the Netherlands, Sweden and Denmark — rejected a compromise struck by Germany and France, the two largest economies in Europe. The holdouts insist that member states most affected by the Covid-19 crisis should be offered loans and not grants.

The rift complicates efforts to get money quickly to countries hit hardest by the pandemic, such as Spain and Italy, where anti-EU sentiment is rising. Leaders caution that the future of the European Union could hinge on what happens next.

The stakes: An uneven recovery "will rip apart our single market and set the scene for significant political and financial tensions in the euro area and the EU," Mário Centeno, president of the body of Europe's finance ministers, warned recently in an interview with the Greek newspaper Politis. "We will sleepwalk into a financial crisis."

Mujtaba Rahman, managing director for Europe at the consultancy Eurasia Group, expects the Commission to call for a recovery fund on Wednesday worth €600 billion ($661 billion) to €700 billion ($771 billion), though the headline number could be lowered during talks. He thinks the proposal will include a mix of cheap loans and direct grants to try to bring the more conservative northern states on board.

SpaceX is about to send astronauts into space

On Wednesday, SpaceX — Elon Musk's private spaceflight company — will attempt to launch two NASA astronauts to the International Space Station in a mission called Demo-2.

The mission marks the first time in history that a commercial aerospace company has carried humans into Earth's orbit. It's also the first time the United States has launched its own astronauts into space since the Space Shuttle Program ended in 2011.

The details: NASA and SpaceX are currently targeting Wednesday at 4:33 p.m. ET for liftoff from Florida's Kennedy Space Center. If bad weather or technical issues get in the way, NASA has May 30 and May 31 down as backup days.

Why it matters: The mission is a key milestone for the sometimes rocky relationship between SpaceX and NASA. And it's a crucial moment for SpaceX as it works to build reusable spacecraft that could make space travel cheaper and more accessible.

Investor insight: SpaceX on Tuesday said it had raised $346 million in a new round of funding, per Reuters. The company has raised more than $567 million in total and is valued at about $36 billion, according to a CNBC report.

Up next

Amazon, Facebook, ExxonMobil and BP hold their annual shareholder meetings — virtually, of course.

Also today: The latest data on US crude inventories posts at 10:30 a.m. ET.

Coming tomorrow: A batch of fresh US economic data, including orders for durable goods in April and the second reading of US GDP for the first quarter.