Stock futures seesaw after White House, Senate reach deal on coronavirus bill

Stock futures seesawed in early Wednesday morning trading, following Tuesday’s historic rally, as the White House and Senate reached a deal on a coronavirus stimulus bill.

As of around 2:11 a.m. ET, futures on the Dow Jones Industrial Average rose 99 points, pointing to a gain of about 122 points at the Wednesday open.

S&P 500 futures and Nasdaq-100 futures, on the other hand, pointed to slight declines for the two indexes at the open on Wednesday. Earlier, futures for the two indexes pointed to slim gains.

The moves came after NBC News reported Wednesday morning that the White House and Senate leaders agreed on a massive $2 trillion coronavirus stimulus bill. 

“At last we have a deal,” Senate Majority Leader Mitch McConnell announced shortly before 2 a.m. Wednesday, according to NBC. “In effect, this is a war time investment.”

Ahead of the news, Dow futures had pointed to an opening fall of about 200 points.

The action in the futures market followed an epic comeback on Wall Street. The Dow soared more than 2,100 points, or more than 11%, notching its biggest one-day percentage gain since 1933 and its best point increase ever. The S&P 500 rallied 9.4% for its best day since October 2008. 

Even with Tuesday’s massive rebound, some on Wall Street struggle to see the light at the end of the tunnel, especially without a clear sign that the coronavirus outbreak will be contained soon. 

“This was a one-day bull market,” CNBC’s Jim Cramer said on “Closing Bell” on Tuesday. “You had stocks that moved so much they basically moved as if the second half of the year is going to be good. I struggle to find out why the second half of the year should be good …I hate this kind of rally. This was a machine driven rally, just like the sell-offs … I want to wait to see.”

Last week, the Cboe Volatility Index (VIX), also known as Wall Street’s fear gauge, eclipsed its financial crisis high and closed at 82.69.

While the VIX was in the 60 range on Tuesday, that level is about three times the long-term average for the indicator at “around 20,” Tim Edwards, managing director of index investment strategy at S&P Dow Jones Indices, told CNBC’s “Squawk Box Asia” on Wednesday morning Singapore time.

3%, 4% move is the new normal, at least for the short-term, for the S&P 500

Tim Edwards

managing director of index investment strategy, S&P Dow Jones Indices

“On average the S&P 500, super long time, moves up or down by about 1% every day. You can expect to see around three times that,” Edwards said. “3%, 4% move is the new normal, at least for the short-term, for the S&P 500.”

Meanwhile, the coronavirus cases in the U.S. and globally still haven’t shown a sign of peaking. More than 400,000 cases have been confirmed worldwide, including over 50,000 in the U.S., according to Johns Hopkins University. So far, more than 600 deaths related to the coronavirus have been confirmed in the U.S. New York City reported nearly 15,000 cases Tuesday and 131 related deaths.

— CNBC’s Jesse Pound contributed reporting.

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