Stocks recorded a monster relief rally on Tuesday as Trump’s proposed stimulus package gained traction.
The Dow and broader U.S. stock market rallied sharply on Tuesday amid signs that lawmakers were nearing a new stimulus bill to revive the economy amid the coronavirus pandemic.
All of Wall Street’s major indices reported significant gains on Tuesday, reflecting an upbeat pre-market session. The Dow Jones Industrial Average (DIA) rallied 2,093.11 points, or 11.3%, to 20,287.78.
The broad S&P 500 Index of large-cap stocks gained 9.3% to close at 2,446.39. All 11 primary sectors reported gains, with energy leading the pack. Materials, industrials and financials stocks also reported oversized gains.
Meanwhile, the technology-focused Nasdaq Composite Index (QQQ) rose 8.1% to settle at 7,417.86.
The Chicago Board Options Exchange (CBOE) Volatility Index, commonly known as the VIX, reached an intraday low of 36.24 on a scale of 1-100 where 20 represents the historic average. That represents a significant retreat from earlier in the month when the index was in the mid-80s. The so-called “investor fear index” would eventually settle down 1.5% at 60.66.
Equities surged amid news that the Trump administration was nearing a massive $1.6 trillion stimulus package designed to shield the economy from the coronavirus pandemic. According to The Wall Street Journal, the two sides could be hours away from finalizing the agreement.
“I believe we’re on the 5-yard line,” said Senate Majority Leader Mitch McConnell, as per the Journal. “I hope today is the day this body will get it done.”
The Final Word: The United States has become a major epicenter for the coronavirus outbreak, with several states declaring lockdowns. The caseload now exceeds 46,000, making America the third-most infected nation behind China and Italy.