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Stock market news live: Dow skyrockets to best day since 1933; markets bet on stimulus

Emily McCormick , Javier E. David and Nishant Mohan
Updated 9 min read

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Stocks staged a monster rally on Tuesday, with the battered Dow Jones Industrial Average posting its best day since 1933, as Wall Street bet that Washington’s warring political factions will coalesce around a $2 trillion stimulus package to combat the effects of the coronavirus.

[Click here to see what’s moving markets on Wednesday, March 25.]

Negotiations over the package, meant to backstop reeling consumers forced to stay home from work and throw financial lifelines to key industries, helped major benchmarks reverse a bloodletting that’s dragged them deep into a bear market.

The Dow rallied by over 11% to close up by over 2,100 points — only a day after a sell-off virtually erased all of the gains made since President Donald Trump was elected — and its best day in nearly 90 years. The S&P 500 Index had its strongest session since 2008, while the Nasdaq turned in its best performance in 7 days.

The damage — both economic and political — from COVID-19 has stoked a widening debate over how quickly the U.S. can return to a semblance of normalcy. With his re-election chances likely to be defined by a recovery from the crisis, President Donald Trump on Tuesday called for the economy to be restarted by April 12 — but market analysts have their doubts about that timetable.

So far, 591 people have died of coronavirus in the U.S. (Graphic: David Foster/Yahoo Finance)
So far, 591 people have died of coronavirus in the U.S. (Graphic: David Foster/Yahoo Finance)

“The current crisis is, at its core, a health policy problem resulting from the pandemic,” Eric Stein, co-director of fixed income at Eaton Vance, wrote this week.“And, it's going to be health-policy that leads us to ‘flatten the curve’ and hopefully diminish the projected death rates and help us to resume normalcy.”

Damage from the outbreak has taken a massive toll on small and local businesses, as well as the country’s largest corporations, as residents practice social distancing and shun leisure and travel. These jarring, if temporary, societal dislocations have been aimed at slowing the spread of the coronavirus, which has sickened more than 46,000 in the U.S. as of Tuesday morning, according to Johns Hopkins data.

The repeat stalling of the Senate’s bill came in the wake of U.S. Federal Reserve unleashing its own new and extensive measures designed keep corporate credit flowing, and other critical parts of the economy functioning smoothly. The new program included unprecedented measures from the Fed, including purchases of eligible corporate bonds from companies and exchange-traded funds, and purchases of commercial mortgage-backed securities.

Stein wrote that “the crisis can also benefit from good fiscal policy, by and large, to help drive the economy forward, whether it's helping businesses, municipalities and workers. In my view, monetary policy plays a key role in ensuring the markets are functioning and in providing working capital credit to the broader economy.”

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