The Dow Jones Industrial Average surged to its best day since 1933 as Congress and the White House neared a deal to inject nearly two trillion US dollars (£1.7 trillion) of aid into an economy ravaged by coronavirus.
The Dow soared 11.4% higher, while the more closely followed S&P 500 index leapt 9.4% as a wave of buying around the world interrupted what has been a brutal month of nearly nonstop selling.
Despite the gains, investors were far from saying markets have hit bottom. Rallies nearly as big as this have punctuated the last few weeks, and none lasted more than a day.
Today’s market update: • The Dow had its biggest one-day point gain ever, closing up 11.37% • Sentiment buoyed as Congress closes in on stimulus package • The ICE BofA MOVE Index, measuring bond volatility, fell over 24 points to close at 111.09
— ICE Data Services (@ICEDataServices) March 24, 2020
Both Democrats and Republicans said they are close to agreeing on a massive economic rescue package, which will include payments to US households and aid for small businesses and the travel industry, among other things.
Investors have been waiting in frustration for such aid, particularly as the Federal Reserve has done nearly all it can to sustain markets, including its latest round of extraordinary aid launched Monday.
The Dow rose 2,112.98 points, its biggest point gain in history, to 20,704.91.
The S&P 500, which is much more important to most 401(k) accounts, rose 209.93, or 9.4%, to 2,447.33 for its third-biggest percentage gain since World War Two.
The Nasdaq composite jumped 557.18 points, or 8.1%, to 7,417.86.
The buying circled the world. South Korean stocks surged 8.6%, Germany’s market jumped 11% and Treasury yields rose in a sign that investors are feeling less fearful.
The market has seen rebounds like this before, only for them to wash out immediately.
Since stocks began selling off on February 20, the S&P 500 has had six days where it has risen, and all but one of them were big gains of more than 4%.
After them, stocks fell an average of 5% the next day.
Ultimately, investors say they need to see the number of new infections peak before markets can find a floor. The increasing spread is forcing companies to park planes, shut hotels and close restaurants to dine-in customers.
President Donald Trump said on Tuesday during a Fox News virtual town hall that he hopes to “open up ” the economy by Easter.
Analysts said the pronouncement was not a contributor to the day’s huge rally, which was mostly due to the stimulus hopes.