Stocks swung wildly Tuesday as Wall Street struggled toÂ to recover from its worst day in more than 30 years despite signs of potential fiscal stimulus and progress on a possible treatment Â for the coronavirus.
Trading overnight was also volatile with Dow futures giving back more than 1,000 points in the lastest exampleÂ
Those moves came after Politico and The Washington Post reported that Treasury Secretary Steven Mnuchin will ask congressional lawmakers forÂ aÂ stimulusÂ package ofÂ $850 billion or moreÂ to help the U.S. economy grapple with the impact of the coronavirus.
Biotech giantÂ Regeneron, meanwhile, said Tuesday morning that it’s aiming toÂ have doses of a potential drug for COVID-19 ready to start human clinical trials by early summer. The announcement, which represents a marked acceleration in the company’s drug timeline, sparked a 10% rally in the company’s equity in premarket trading.
Those wild moves came after President Donald Trump tweeted: “The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!”
At least 4,281 cases have been confirmed in the U.S. along with more than 70 deaths, according to data from Johns Hopkins University. President Donald Trump also said the crisis could stretch into August, adding the administration may look at locking down “certain areas.”
The Dow and S&P 500 had on Monday their biggest one-day losses since 1987, falling 12.9% and 12%, respectively. It was also the Dow’s third-worst day ever. The Nasdaq Composite had its biggest one-day plunge ever, tumbling 12.3%.
“Yesterday was a real washout,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “I think we’ll have a recession. It’s just a question of how steep it will be.”
The Cboe Volatility Index (VIX) â Wall Street’s preferred fear gauge â posted its highest-ever close at 82.69. That tops the financial crisis’ peak of 80.74. On Tuesday, the VIX traded down 2.3 points at 80.40.
Wall Street’s drop on Monday came even after the Federal Reserve slashed interest rates to near-zero on Sunday and announced a $750 billion asset-purchasing program. It also came as the number of coronavirus cases jumped in the U.S.Â
“Although the contemporary crisis is loaded with bad news, this has not been its primary problem. It’s the ‘unknown,'” said Jim Paulsen, chief investment strategist at The Leuthold Group, in a note. “Not even health experts understand what this is or where it is headed, and that is the worst possible outcome for investors.
âCNBC’s Thomas Franck and Eustance Huang contributed to this report.
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