What’s happening: US stocks closed higher on Tuesday, with the Dow recording its largest single-day point gain in history and the biggest percentage rise since 1933.
What happened: Optimism was high on Wall Street yesterday, as US lawmakers seemed to be moving closer towards a massive stimulus deal. US stocks jumped after delivering a steep decline in the previous trading session on news of the lawmakers failing for the second time to reach an agreement.
There were some stocks that gained more than others, amid the strong buying on Wall Street yesterday.
Why it matters: President Donald Trump announced plans to kickstart the economy and ease the losses being recorded by small- and medium-sized businesses. Top officials of both the Republicans and Democrats expressed optimism around the coronavirus stimulus bill being cleared. The deal, however, is still awaiting clearance and is expected to be announced today.
The coronavirus pandemic has infected over 55,200 people in the US and claimed around 800 lives so far, according to figures published by Johns Hopkins University. The US is the third most affected country behind China and Italy. Italy has confirmed over 69,100 COVID-19 cases, with the total worldwide case-count at 424,000.
Despite the continued virus proliferation, investor sentiment was boosted by hopes of the US implementing the coronavirus stimulus bill soon. Energy and financials stocks led the rally on Tuesday by advancing around 16% and 13%, respectively. The Dow spiked 2,113 points to settle at 20,705, while the S&P 500 climbed 9.4% to 2,447. The Nasdaq 100 index advanced 8.1% to close at 7,418.
Shares of Intel surged 6%, despite the company announcing plans to suspend its share buyback program. General Motors’ stock spiked 12% after the company disclosed plans to draw around $16 billion from its revolving credit facilities.
Meanwhile, the IHS Markit’s manufacturing PMI (Purchasing Manager’s Index) dipped to 49.2 in March, from a reading of 50.7 in February. The service sector PMI plunged to 39.1 in March, from 49.9 in the previous month. New residential home sales declined 4.4% to an annual rate of 765,000 for February.
In other news, yield on the 10-year US Treasury note rose 8 basis points to 0.83%, while WTI crude oil gained 1.5% to $23.72.
Why it matters: With the Senate and the White House reaching an agreement on a $2 trillion stimulus today, US markets are expected to continue their positive momentum from yesterday. US stock futures are also pointing to a higher open on Wall Street. Investors await a couple of economic reports from the country, including durable goods orders and house price index.
What to watch: US durable goods orders, which fell 0.2% in January, are expected to drop 0.8% in February. The FHFA house price index is expected to rise 0.3% in January, versus a 0.6% gain in December.