Global stocks, oil mount a recovery while Dow futures gain 500 points
The mood among investors was helped by news of President Donald Trump’s plan to propose “significant relief” in the form of a payroll tax cut and help for hourly workers most affected by the coronavirus, and expectations of more stimulus measures elsewhere.
European shares opened higher after Monday’s plunge. In the opening minutes of trade, the FTSE 100 (UKX), the French CAC 40 (CAC40) and Germany’s DAX (DAX) were all trading around 1% higher.
US oil futures were last up about nearly 6% to $33 a barrel, while the global benchmark Brent crude rose 4.9% to nearly $36 a barrel.
Australia’s S&P/ASX 200 closed up 3.1%, the index’s best day since November 2016. The strong showing saved the index from entering into a bear market, defined as a 20% drop below a recent high. Hong Kong’s Hang Seng Index (HSI) closed up roughly 1.5%, while China’s Shanghai Composite (SHCOMP) was up 1.8%.
Japan’s Nikkei 225 (N225) increased 0.9%. The Japanese government is expected to announce more emergency measures to support families and small businesses hurt by the coronavirus outbreak. Large Japanese companies are also feeling the pain: Nissan’s (NSANY) vehicle sales in China dropped 80% in February.
US stock futures, meanwhile, are recovering after Monday’s historic declines. After initially falling after hours, Dow (DJI) futures shot up after President Trump said he would press lawmakers to enact a payroll tax cut and ensure assistance is available to hourly workers as the coronavirus pandemic causes deep economic concerns and stock market shock. The Dow had ended the day with its biggest point drop in history, closing Monday down 2,014 points, or 7.8% — its worst day since the 2008 financial crisis.
After Monday’s plunge, all three US indexes were nearly 20% below their most recent highs. If stocks fall further when the market opens on Tuesday, they will have slid from record highs to a bear market in a matter of weeks.
The coronavirus outbreak is hammering markets, and broader economies, in the United States and around the world. The number of cases globally has now topped 100,000, with at least 728 cases and 26 deaths in the United States as of early Tuesday morning.
Italy’s prime minister announced that the entire country will be on lockdown from Tuesday as cases of the virus rise, extending strict travel restrictions and bans on large gatherings.
Oil prices suffered their worst day since 1991 on Monday after Saudi Arabia shocked the market by launching a price war against onetime ally Russia. US oil prices dropped as much as 34%, ending at a four-year low of $27.34 a barrel.
— Julia Horowitz, Kaori Enjoji, Laura He, Anneken Tappe and Matt Egan contributed to this report.