Stock-index futures jumped Tuesday, pointing to a partial rebound from Wall Street’s worst selloff since 2008, on hopes for fiscal stimulus measures from Washington aimed at helping alleviate the strain and uncertainty surrounding the COVID-19 outbreak.
A Tuesday rebound would not be unusual — Bespoke Investment Group strategists found that in the 10 previous times since 1952 that the S&P 500 fell 5% or more on a Monday, the index has gained the following day, by an average of 4.2%.
What are the major indexes doing?
Dow Jones Industrial Average futures YM00, +3.49% were up 831 points, or 3.5%, at 24,570 after being up more than 1,000 points in earlier action. S&P 500 futures ES00, +3.53% rose 90.8 points, or 3.3%, to 2,838.50. Nasdaq-100 futures NQ00, +3.57% advanced 276 points, or 3.5, to 8,227.50
Thee Dow DJIA, -7.78% on Monday plunged 2,013.76 points, or 7.8%, to 23,851.02, while the S&P 500 SPX, -7.59% fell 225.81 points, or 7.6%, to end at 2,746.56, near its session low. The Nasdaq Composite Index COMP, -7.28% plunged 624.94 points, or 7.3%, to finish at 7,950.68. All three benchmarks suffered their biggest one-day percentage declines since 2008.
What’s driving the market?
Futures found support late Monday after President Donald Trump said in a White House news conference that he would seek payroll tax relief and other measures to help businesses deal with the coronavirus outbreak. Trump said he would announce more details Tuesday, and discuss “a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s big, that’s a big number,” the Associated Press reported.
Administration officials said the White House wasn’t ready to roll out specific economic proposals, CNBC reported, citing administration officials.
Monday’s stock plunge was the result of growing fears of the economic toll that the rapidly spreading COVID-19 outbreak will take, as well as a selloff in oil and shares of energy-related companies amid a crude-oil price war between Saudi Arabia and Russia.
See:Why an ‘oil shock’ sent the Dow down 2,000 points and upended global financial markets
Also read:Why U.S. shale oil producers are the real target in the Saudi-Russia price war
“The question right now is whether this recovery in risk sentiment is durable, or whether this is merely a temporary calm before the next storm. On the margin, the latter seems more likely for now,” said Marios Hadjikyriacos, investment analyst at XM, in a note.
Meanwhile, investors continue to keep close tabs on the global coronavirus outbreak. Italy moved into full lockdown, with teh government barring persons from leaving cities in which they reside without special permission and implementing range of other measures.
Meanwhile, airlines, including American Airlines Group Inc. AAL, -7.63% , Delta Air Lines Inc. DAL, -5.16% and Southwest Airlines Co. LUV, -4.61% announced capacity reductions and other measures in response to the coronavirus outbreak.
Shares of American Airlines jumped 5.2%, while Delta shares were up 2.7% and Southwest jumped 5%.
What are other markets doing?
After plummeting 25% Monday, their worst day since the 1991 Gulf War, crude oil prices wre on the rise. West Texas Intermediate crude for April delivery CLJ20, +7.87% on the New York Mercantile Exchange rose 8.6% to $33.80 a barrel, while May Brent crude BRNK20, +8.41%, the global benchmark, gained 9.4%, to $37.61 a barrel.
Treasury prices also retreated lifting yields, as haven flows abated. Yields, which move in the opposite direction of price, dropped sharply on Monday, sending the 10-year note TMUBMUSD10Y, 0.645% and 30-year bond TMUBMUSD30Y, 1.127% rates to all-time lows. The 10-year yield popped 15.1 basis points to 0.652%, while the 30-year yield was 21 basis points higher to 1.134%.
Gold futures GCJ20, -0.53% slipped 0.5% to 1,668.20 an ounce.
Which stocks are in focus?
Tesla Inc. TSLA, -13.57% shares bounced nearly 11% premarket after a series of lows.
Shares of Thor Industries Inc. THO, -26.79% jumped premarket even after a hefty stock price target cut, to $75 from $95, by KeyBanc Capital analysts.
Related: Here’s how the plunging stock market could cause a recession
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