Reuters / John Gress
- US stocks rose on Tuesday due to several reports that an economic aid package for corona viruses will soon be available.
- The Dow Jones industrial average rose 11.4%, or 2,113 points. This was the largest point gain ever and the largest percentage increase since 1933.
- Stocks recovered from Monday's falls that occurred even after the Federal Reserve took unprecedented measures to support the US economy in the face of the aftermath of the coronavirus outbreak.
- Read more about Business Insider.
US stocks rose on Tuesday and recovered from a more than three-year low on Monday as investors eagerly awaited a comprehensive economic relief package for corona viruses that is in the final stages of its approval.
Early profits were extended Tuesday morning when House Speaker Nancy Pelosi said when calling CNBC that this was the case "Real optimism" that an agreement could be reached in the next few hours.
Later Senate majority leader Chuck Schumer said conversations were on the 2 yard line. The main indices rose to session highs in the last 30 minutes of trading.
Here were the most important US indices on Tuesday at the end of the market:
"It is quite likely that we will see a deal this week," Seema Shah, chief strategist at Principal Global Investors, said in an interview with Business Insider as policymakers understand how urgent it is. Until there is a clear government announcement, markets will likely have difficulty holding onto any gains, Shah said.
The The Washington Post reported early Tuesday These majority leaders approached an agreement on a $ 2 trillion coronavirus bailout after several attempts to get one through Congress failed. Treasury Secretary Steven Mnuchin and Senate Minority Chair Chuck Schumer were optimistic that an agreement could be reached soon, the report said.
Shares slumped on Monday as leaders failed to agree on an agreement to contain the economic consequences of the coronavirus pandemic. Pressure has increased as many states have bans to curb the spread of COVID-19, the disease caused by the virus.
The rally on Tuesday took place after Monday's Federal Reserve announced unprecedented measures to support the economy during the outbreak, including unlimited bond purchases and aid to local governments and businesses. However, the outbreak has already had an impact – US economic activity declined the most since March in 2009, as data released on Tuesday show.
According to Shah, the details of the stimulus package and the targeted help it offers will be extremely important in the future. If the plan focuses on employing workers, "it will change the outlook significantly and the markets will like it," said Shah.
Markets are also likely to be volatile until the number of COVID-19 cases in the U.S. peaks, Jeff Kleintop, chief global investment strategist at Charles Schwab, told Business Insider.
The stimulus package to prevent mass layoffs and bankruptcies while the US is grappling with the outbreak was "really just a bridge," he said. It will not upset the economy, "it only prevents a bad problem from worsening in the short term," said Kleintop.
According to Kleintop, oil could be a better indicator of the economic environment than investor sentiment. The commodity gained early in the day but reduced losses as supply surge and weaker demand due to the coronavirus pandemic outweighed the U.S. government's efforts to boost the economy.
The US dollar weakened against other currencies on Tuesday, a developing and emerging market, a good sign that the Fed is a step ahead of the dollar shortage, according to Kleintop. Gold, the safe haven, also rose sharply on Tuesday after a recent decline.
"The bottom line is that this market has been extremely dangerous since February," wrote Fundstrat's Thomas Lee in a note on Tuesday. "But there is a glimmer of hope."
(tagsToTranslate) Wall Street (t) Equities (t) Stock Exchange (t) Market Wrap (t) Equities Wrap (t) s & p 500 (t) Dow Jones Industrial Average (t) Tax Incentives (t) Coronavirus Aid Bill (t )) Coronavirus (t) recession (t) stocks (t) US markets