Stocks surged on Tuesday as the Dow recorded its largest one-day gain since 1933, driven by expectations of an economic stimulus package from Congress to offset the effects of the Wuhan coronavirus pandemic.
The Dow Jones Industrial Average rose 2,112.98 points, over 11 percent, while S&P 500 rose 9.4 percent to 2,447.33. The Nasdaq Composite Index rose 8.1 percent to 7,417.86. The gains follow optimistic statements by some Trump administration officials and members of Congress regarding the completion of a massive economic stimulus bill, even though no agreement had been reached by Tuesday afternoon.
The major equity indexes are nevertheless down about 24 percent from their highs reached in February.
“We’re looking forward to closing a bipartisan deal today,” Treasury Secretary Steve Mnuchin told reporters on Tuesday morning. Mnuchin spent the day meeting with members of Congress from both parties to negotiate the details of the stimulus.
“From a market perspective . . . it feels like we’re coming to the end of it,” Michael Novogratz, CEO of Galaxy Digital, told CNBC‘s Squawk Box. “It doesn’t necessarily mean the market’s going to go up, but a lot of that crazy volatility is kind of coming out.”
The rise in the markets also came despite more news of layoffs and shutdowns in various industries. Boeing on Monday closed production facilities in the Seattle, Wash., area for a projected two weeks due to coronavirus cases among its employees and a wider outbreak in the region. General Motors has shuttered factories across the U.S. to prevent coronavirus outbreaks among employees.