U.S. stock futures pointed to a firm bounce for Wall Street on Tuesday, on the heels of a 3,000-point loss triggered by investor fears that a sharp economic downturn was unavoidable as a result of the rampant coronavirus outbreak.
How did stocks perform?
U.S. stock futures surged, hitting a 5% limit up at one point late Monday. Dow Jones Industrial Average futures YMH20, +1.47% were last up about nearly 800 points early Tuesday, or 3.7%, to 21,012, while S&P 500 futures ESH20, +1.65% climbed 88.45 points, or 3.7%, to 2,493.75. Nasdaq-100 NQH20, +1.99% futures rose 236.75 points, or 3.4%, to 7,277.25.
On Monday, the Dow Jones Industrial Average DJIA, -12.93% plunged 2,997.10 points, or 12.9%, to settle at 20,188.52, while the S&P 500 index SPX, -11.98% declined 324.89 points, or 12%, to end at 2,386.13, and the Nasdaq Composite Index COMP, -12.32% shed 970.28 points, or 12.3%, to finish at 6,904.59.
Trading was so intense that circuit breakers temporarily halted trading for 15 minutes at one point on Monday. It marked the worst session in history for the Nasdaq.
What’s driving the market?
There were small shoots of green among Asian markets, while European stocks also rose. Italy and Spain have seen the biggest hits from the virus, but France is quickly up to that, and governments have been locking down citizens as cases climb quickly.
That’s as the U.S. has also been shutting down cities, and investors have been overwhelmed by rapid-fire updates of unsettling coronavirus update, including a warning by President Donald Trump of a possible recession due to the outbreak. The Federal Reserve’s emergency Sunday interest rate cut has done little to spark any buying on Wall Street, spooked by the rapid spread of COVID-19, and investors are now waiting for more relief for individuals and small businesses.
The head of the International Monetary Fund said Monday that it will mobilize its $1 trillion lending capacity if needed to help countries lessen the blow from the coronavirus pandemic.
“Hence, governments around the world are seeking other measures to calm down the markets’ nerves. The U.K. promised extra help for businesses battling the virus-led slowdown, and temporary business shutdowns. France pledged to allocate 300 billion euros of bank loans to companies hit by the pandemic. Spain banned short selling for a month to contain the heavy volatility that may cause additional damage to the financial system,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note to clients.
Tuesday will see the release of several data points, including February retail sales, industrial production, job openings, a home builders index and business inventories.
Oil prices also attempted to gain, with April crude futures CL00, +2.16% climbing 4% to $29.88 a barrel.