The S&P 500, Dow and Nasdaq opened higher and recovered some of Monday’s steep losses, boosted by assurances from the White House that stimulus measures could be on the way.
Ahead of the opening bell, U.S. equity futures had risen more than 4% Tuesday. At a press briefing Monday night, President Donald Trump said he would be meeting with Senate and House Republicans Tuesday to consider “a possible tax relief measure” in response to the coronavirus.
The overnight surge sent futures on the S&P 500 up to their limit-up band of 2,879 Monday morning, capping further gains a day after Sunday’s overnight sent contracts tumbling enough to trigger a lower limit circuit-breaker. The limit-up band is set each day by the Chicago Mercantile Exchange.
This came after stocks on Monday posted their largest one-day percent declines since late 2008, with each of the S&P 500 (^GSPC), Dow (^DJI) and Nasdaq (^IXIC) off more than 7%. The drubbing – spurred as fears over the coronavirus outbreak compounded with panic over a price war in oil markets – erased more than $1.87 trillion from the S&P 500’s market value in the one-day period alone.
Monday’s stunning losses came as panic flared over an oil price war between Saudi Arabia and Russia. These fears added to the central concern over the spread of COVID-19 and the economic fall-out that could result. The World Health Organization’s director-general Tedros Adhanom Ghebreyesus said during a briefing Monday that the “threat of a pandemic [had] become very real,” with the total number of cases topping 114,000 and the death toll breaching 4,000 as of Tuesday.
As the case count continues to rise, countries have individually ramped up measures to try and stem the spread of the virus. Italy, the country with the highest coronavirus death toll outside of China, Monday night extended a lockdown and travel restrictions to residents across the entire country, after initially enforcing these measures just for regions in its north.
With concerns about the coronavirus outbreak compounding with precipitous declines in oil prices and Treasury yields, investors have increasingly bet on further stimulus from global policymakers.
As of Tuesday, markets priced in a more than 50% probability that the Federal Reserve would step in with at least 50 basis points of rate cuts by the end of their April policy-setting meeting, bringing the lower band on benchmark interest rates down to 0.25% from 1% currently, according to CME Group data.
“After last week’s rate cut, we said the odds that the Fed would cut rates to zero had risen to around 50%,” JPMorgan economist Michael Feroli wrote in a note Monday. “We believe the news flow has worsened since then: Our global colleagues have marked down growth estimates further—particularly in Europe—an increasing number of domestic activities are being cancelled, and the collapse in energy prices could deliver acute pain to certain regional U.S. economies.”
“In this environment we see no good reason for the Fed to ‘keep its powder dry,’ but instead now believe it will cut the interest on excess reserve (IOER) rate to zero at or before the March 18th meeting,” he said, referring to the amount paid to commercial banks to keep their funds with the Fed.
10:15 a.m. ET: Cheap gas on the way as oil crashes
The unmitigated clobbering of crude prices on Monday, in the midst of a power struggle between Russia and Saudi Arabia, was a force multiplier for the selloff. Still, the silver lining is in gas prices — which Deutsche Bank’s Torsten Slok said should hit $2 in relatively short order:
10 a.m. ET: SEC goes all in on WFH after employee has respiratory trouble
With coronavirus panic hitting a peak, Securities and Exchange Commission employees have been encouraged to work remotely — indefinitely — after one employee at its DC headquarters received treatment for respiratory symptoms on Monday.
In New York City, Mayor Bill de Blasio has encouraged all city residents to work from home if they can as the state’s new COVID-19 case count soars to the highest in the U.S.
9:49 a.m. ET: Oil prices, energy stocks catch a bid higher after leading Monday’s declines
Tuesday’s gains were led by Monday’s laggards.
The Energy sector led gains in the S&P 500, rising more than 3% after sliding 20% Monday. Individual names also recovered some of Monday’s losses, with Marathon Oil Corporation (MRO) jumping 16.8%, Occidental Petroleum Corporation (OXY) climbing 6% and Apache (APA) increased 4%.
Crude oil prices also recovered some of Monday’s steep losses, with West Texas intermediate prices up more than 7.5%. This came even after Saudi Arabia pledged to boost supply up to 12.3 million barrels of oil per day in April, or about 25% higher than last month’s pace, in an escalation of a price war with Russia. the
9:33 a.m. ET: Stocks open higher a day after their worst decline since 2008
The S&P 500 extended overnight gains as markets opened for trading Tuesday. The index was on track to recover some losses after tumbling more than 7% Monday in its biggest decline since 2008.
Here were the main moves in markets, as of 9:33 a.m. ET:
- S&P 500 (^GSPC): 2,835.83, up 89.27 points, or +3.25%
- Dow (^DJI): 24,680.06, up 829.04 points or +3.48%
- Nasdaq (^IXIC): 8,217.96, up 272.44 points or +3.55%
- Crude oil (CL=F): $33.69, up $2.56 or +8.22%
- 10-year Treasury (^TNX): yielding 0.674%, up 17.6 basis points
7:35 a.m. ET Tuesday: Stock futures leap higher, Dow contracts rise 900+ points
U.S. stock futures vaulted higher Tuesday morning and followed global equities higher, after President Donald Trump floated the notion of a payroll tax cut to help alleviate the impact from the coronavirus.
Treasury yields also recovered losses from Monday, the first session ever in which in entire yield curve fell below 1%. The benchmark 10-year yield added about 20 basis points and approached 0.7%.
Here were the main moves in markets, as of 7:35 a.m. ET:
- S&P 500 futures (ES=F): 2,860.25, up 112.5 points or +4.09%
- Dow futures (YM=F): 24,833, up 956 points or +4.00%
- Nasdaq futures (NQ=F): 8,294.75, up 343.25 points or +4.32%
- Crude oil (CL=F): $33.86 per barrel, up 8.77%
- Gold (GC=F): $1,664.70 per ounce, down $11 or -0.66%
- 10-year Treasury note (^TNX): yielding 0.696%, up 19.8 basis points
7:27 p.m. ET Monday: Stock futures rise
- S&P 500 futures (ES=F): +23.50 points (+0.86%) to 2,771.25
- Dow futures (YM=F): +199 points (+0.83%) to 24,076.00
- Crude oil (CL=F): +2.73% to $31.98 a barrel
6:39 p.m. ET Monday: Stock futures fall as overnight session kicks off
Stock futures began the overnight session lower, extending losses from Monday.
Here were the main moves in markets, as of 6:39 p.m. ET:
- S&P 500 futures (ES=F): 2,725.25, down 22.5 points or -0.82%
- Dow futures (YM=F): 23,635.00, down 242 points or -1.01%
- Nasdaq futures (NQ=F): 7,901.25, down 50.25 points or -0.63%
- Crude oil (CL=F): $31.17 per barrel, down 0.03%
- Gold (GC=F): $1,675.40 per ounce, up $0.30 or +0.02%