Dow Recovers After Brutal Slide as Trump Backtracks on Covid-19 Relief
Markets rallied on Wednesday after President Trump said he was "ready to sign now" a standalone bill that would provide direct support to Americans. | Image: AP Photo/Evan Vucci, File
- The Dow Jones Industrial Average rose by as much as 330 points after the open.
- President Trump appears to have softened his stance on Covid-19 relief less than 24 hours after instructing representatives to cease negotiations with the Democrats until after the election.
- The president says he supports sending direct payments to Americans, extending the Paycheck Protection Program, and bailing out struggling airlines.
The Dow and broader U.S. stock market rallied on Wednesday after President Trump appeared to soften his stance on negotiating specific Covid-19 relief before the election.
Dow, S&P 500, Nasdaq Rally
All of Wall Street’s major indexes traded higher Wednesday, with the Dow Jones Industrial Average gaining as much as 330 points or 1.2%.
The broad S&P 500 Index of large-cap stocks rose 1.2%, with most major sectors reporting gains. Companies in the materials, industrials, and financial sectors were the biggest gainers.
Rebounding tech shares propelled the Nasdaq Composite Index to gains of 1.3%.
A measure of implied volatility known as the CBOE VIX backtracked slightly on Wednesday but continued to trade well above the long-term average. The so-called “investor fear index” is down 1.6% and trading around 29.00.
Trump Backs Partial Covid-19 Relief
Markets rallied Wednesday after President Trump raised the possibility of direct stimulus relief to American households.
In a series of tweets, the president said he was “ready to sign now ” a standalone bill that would provide $1,200 checks to Americans. He also supports a $25 billion aid package to airlines and a $135 billion extension of the Paycheck Protection Program.
President Trump tanked the markets late Tuesday after advising representatives to cease stimulus negotiations until after the elections . Although lawmakers appeared to be making progress on a new aid package, the Democrat proposal was too exorbitant for the Trump administration.
On Tuesday, Federal Reserve Chairman Jerome Powell warned of potentially devastating consequences if new stimulus relief isn’t passed.
