Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Dow Futures Surge 1,000 Points as Stimulus Hopes Ease Recession Fears

Published 03/10/2020, 07:44 AM
Updated 03/10/2020, 07:45 AM
© Reuters.

© Reuters.

By Noreen Burke

Investing.com - U.S. stock futures pointed to a bounce at the open on Tuesday, rebounding from a 7% slump a day earlier, as hopes for stimulus measures eased investor fears over a global recession in the face of the coronavirus epidemic.

By 07:25 AM ET (1125 GMT), Dow futures added 992 points, or around 4.1%. Nasdaq 100 futures were up 4.2% and S&P 500 futures were up a similar amount.

Yields on benchmark U.S. 10-year Treasury debt more than doubled to 0.70% and those on German Bunds jumped around 20 basis points as investors pared some safe-haven holdings.

The gains came after the three major indices posted their biggest one-day percentage decline on Monday and the Dow tumbled as much as 2,000 points, as markets went into panic mode over the expected economic fallout from the coronavirus outbreak. Market sentiment was also hit by plunging oil prices following the breakdown of a crucial global oil pact.

But signs of policy action by the world's major economies to cushion the effects of the rapidly-spreading virus eased investor nerves over the prospects of a recession.

U.S. President Donald Trump on Monday to take "very major" steps to protect the economy and float the idea of a payroll tax cut with congressional Republicans.

Japan said it would spend another 430.8 billion yen ($4.1 billion) to ease the effects of the coronavirus outbreak and Italy's deputy economy minister announced that mortgage payments would be suspended as the country deals with the second-highest number of cases outside China.

Some of the biggest global investment banks, including JP Morgan, Citi and Barclays, now expect the Federal Reserve to cut U.S. interest rates to zero in the coming months as part of a mass global move to provide some ballast and liquidity to the financial system.

Elsewhere, U.S. crude futures rebounded 9.6% after falling by as much as 30% on Monday. That comes after reports saying that Saudi Arabia plans to sell some 12.3 million barrels of oil a day in April. Given that it is unlikely to be able to ramp up all its spare capacity so quickly, the reports suggest that the kingdom is planning to draw down stocks to maximize sales volumes - an extreme measure that is unlikely to be sustained. 

--Reuters contributed to this report

Latest comments

This article did not age well
this comment did not age well.
dither did this one
 What did you say, mate?
makes yesterday's fall a stupid one... less than 24 hours all is good now... let the puppet play continue
Notice that this morning there is absolutely no news about the growing spread of corona virus. Instead, the news is about how racist it is to call it Chinese. Market up, today. One can simply feel the difference in mood as if corona virus is a hoax. Profits to be made by those in the know. Watch the headlines tomorrow: Corona virus terror - Market freefall.
Yupp all of Italy in quarantine, but who cares? Spain looks to be next country that shuts down. I presume big cities in USA will join in 1 month.
As if stimulus will make people leave their homes to book flights and splurge cash in restaurants / retail etc
thats so stupid you think economy and markets are fed with the money of working class? hahaha gigantic bank loans at low rates, fed the economy, make companies expand and buy more
this is ridiculous, manipulation at it's best.
banks should be getting nervous right now. pressure is on Trump to calm the inevitable which will be if a vaccine is not produced and distributed then it will all hit the fan as in Italy. US is down playing the CV which will back fire.
banks should be getting nervous right now. pressure is on Trump to calm the inevitable which will be if a vaccine is not produced and distributed then it will all hit the fan as in Italy. US is down playing the CV which will back fire
Looks like big media's manufactured panic is about to get Trumped by payroll tax cuts.
the economy can't be in worst shape, corona virus is the perfect cover for the collapse of the economy. Trump will try to stop the collapse until after elections.
The cuts are just a smoke screen to cover the eyes of his supporters. This may be hard to understand but Trump is not a super hero with infinite powers.
it's not a surging.. it's 1500points drop in 2 days
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.