U.S. stock market futures shook off early losses and shot higher late Monday, following Wall Street’s worst selloff since 2008.
A Tuesday rebound would not be unusual — Bespoke Investment Group strategists found that in the 10 previous times since 1952 that the S&P 500 fell 5% or more on a Monday, the index has gained the following day, by an average of 4.2%.
The Dow Jones Industrial Average jumped more than 700 points in premarket trade on Tuesday, following one of its worst days on record on Monday when the index dropped as much as 2,000 points during the session. Some losses were reversed after the bell after United States President Donald Trump said he may introduce new payroll tax cuts in order to respond to the coronavirus crisis.
Futures started rallying late Monday after President Donald Trump said in a White House news conference that he would seek payroll tax relief and other measures to help businesses amid the coronavirus outbreak. Trump said he would announce more details Tuesday and discuss “a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s big, that’s a big number,” the Associated Press reported. “We’re also going to be talking about hourly wage earners getting help so that they can be in a position where they’re not going to ever miss a paycheck.”
Monday’s stock plunge was the result of growing fears of the economic toll that the rapidly spreading COVID-19 outbreak will take, as well as a selloff in energy-related companies amid a crude-oil price war kicked off over the weekend between Saudi Arabia and Russia.
After plummeting 25% Monday, their worst day since the 1991 Gulf War, crude oil prices ticked up in electronic trading late Monday. West Texas Intermediate crude for April delivery CLJ20, 7.067% on the New York Mercantile Exchange rose 5.6% to $32.94 a barrel. May Brent crude BRNK20, 6.054%, the global benchmark, gained 6.7%, to $36.75.
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