(Reuters) – U.S. stock index futures jumped 5% to their daily upper trading limit on Tuesday, rebounding from a brutal coronavirus-driven selloff on signs that Washington was nearing a deal on a $2 trillion economic rescue package.
The S&P 500 .SPX and Dow Jones .DJI indexes closed about 3% lower on Monday, as a rise in U.S. infections and lockdown in several states overshadowed historic measures by the Federal Reserve to boost credit in the economy.
Traders said the central bank’s measures and expectations of a government stimulus package appeared to be easing some pressure on a market that has seen one of the biggest routs in history.
But they remained doubtful of a long-lasting recovery without evidence of a peaking in the number of new COVID-19 cases.
The benchmark S&P 500 has now lost about $10 trillion in value since hitting a record high last month.
U.S. Treasury secretary Steve Mnuchin said late on Monday negotiations on the rescue package had made significant progress and that a bill could be passed as soon as Tuesday.
A separate proposal from Democrats in the U.S. House of Representatives to grant airlines and contractors a $40 billion bailout helped lift shares of American Airlines (AAL.O), Delta Airlines (DAL.N) and United Airlines (UAL.O) by about 10% premarket.
Boeing (BA.N) rose nearly 9% and was the top gainer among Dow components.
Meanwhile, a surge in oil prices lifted energy stocks, with oil majors Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N) rising more than 7%.
Big U.S. banks including Goldman Sachs (GS.N), JPMorgan (JPM.N) and Citigroup (C.N) rose about 6%, tracking an increase in the 10-year Treasury yield.
With much of the economic blow sliding into the second quarter, investors have shrugged off latest figures showing sharp declines in business activity around the globe.
U.S. surveys of manufacturing and services sector activity, due later in the day, are also likely to show a similar plunge.
At 06:44 a.m. EDT, Dow e-minis 1YMcv1 were up 930 points, or 5.03%, S&P 500 e-minis EScv1 were up 113 points, or 5.09% and Nasdaq 100 e-minis NQcv1 were up 375 points, or 5.37%
SPDR S&P 500 ETFs (SPY.P) were up 5.34%.
The S&P 500 index .SPX closed down 2.93% at 2,237.4 on Monday.
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