The US Stock Market Recorded the Largest One Day Gain Since 1933 Amid Economic Stimulus
The US stock market bounced back sharply and recorded the largest one day gain since 1933 as investors are optimistic about the multi-trillion stimulus program.
Dow Jones Industrial Average marked a 12% increase in Tuesday trading, led by oil giants like Chevron and Exxon.
The Nasdaq index surged 8.1% and the S&P 500 gained 9.4% as investors have started buying the stocks after the historic crash in the last month.
The US stock market rebounded on prospects of returning to normal economic activity in the coming days along with news that Trump administration is likely to sign a $2 trillion stimulus package.
“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.
Some analysts believe it’s still too early to say the markets have started stabilizing because several big names are laying-off their employees and closing production facilities in the wake of coronavirus outspread.
“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.”
Oil prices bounced back slightly after hitting the lowest level since the Gulf war in 1987.
Brent crude jumped to $30 a barrel and the US oil stood around $24. The big inventory draw in the last week added to investor’s sentiments.
The American Petroleum Institute (API) expects a crude oil inventory draw of 1.247 million barrels for the week ending March 21.
The most beaten-down stocks like MGM Resorts, Norwegian Cruise Lines, and American Airlines Group are likely to make a big recovery in the coming days on prospects of reopening the economy by this Easter.
Software, internet, and online retailers have also been gaining investors’ confidence over the past few days.