Stimulus hopes on Tuesday gave traders on Wall Street a shot of adrenaline as all three of the major U.S. stock indexes posted one of their best days ever on Tuesday, a sign of investor belief that Congress has no alternative but to pass a $2 trillion rescue of the U.S. economy.
The Dow Jones Industrial Average rallied +2,112.98 points or +11.4%, its best daily percentage gain since March 1933 and fourth-best and closed at 20,704.91.
The Standard & Poor’s 500 index jumped +209.93 points, or +9.38% to 2,447.33. That is the broad market’s best day since October 2008, while the tech-heavy Nasdaq composite surged +557.18 points, or +8.12%, to 7,417.86.
Senior Democrats and Republicans said they were close to a deal on a $2 trillion stimulus bill, aimed at providing financial aid to Americans out of work and help for distressed industries.
A separate proposal in the U.S. House of Representatives to grant airlines and contractors a $40 billion bailout lifted the S&P 1500 airlines index by 15%.
However, talks continued with no word of a deal by late Tuesday afternoon.
President Donald Trump, describing the proposal as a $2 trillion package, said Tuesday that “we are working to pass the biggest and boldest financial relief package in American history.”
Democrat House Speaker Nancy Pelosi said that there was “real optimism” that a deal could be reached in the next few hours.
Later, Senate Majority Leader Chuck Schumer said that talks were on the 2-yard-line.
The agreement is expected to cushion American workers and businesses from job losses and an anticipated collapse in economic activity from lockdowns triggered by the virus.
Earlier, the U.S. Federal Reserve signalled the gravity of the situation Monday when, in an unprecedented move, it said it would spend whatever it takes to preserve the U.S. financial system.
Market bulls were encouraged by signs President Donald Trump wants to re-open the economy as soon as possible. “I would love to have it open by Easter,” Trump told reporters.
Elsewhere, Bill Gates on Trump calls for a quick end to lockdown –
‘There really is no middle ground, and it’s very tough to say to people, “Hey, keep going to restaurants, go buy new houses, [and] ignore that pile of bodies over in the corner. We want you to keep spending because there’s maybe a politician who thinks GDP growth is all that counts.” – Bill Gates