Stock futures rallied back early Tuesday morning after the S&P 500′s worst day since the financial crisis.
© Spencer Platt / Getty
Around 5:30 a.m. ET Tuesday, futures on the Dow Jones Industrial Average indicated an opening surge of 1,000 points on Tuesday. S&P 500 futures and Nasdaq-100 futures also pointed to a sharply higher open for the two indexes on Tuesday.
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Stock futures erased big losses in after-hours trading Monday and turned positive after President Donald Trump floated the idea of “ a payroll tax cut or relief” to offset the negative impact from the coronavirus. The potential tax incentives come on top of an $8.3 billion spending package Trump signed last month.
The market suffered a historic sell-off in the previous session, with the Dow and the S&P 500 plunging 7.8% and 7.6, respectively, both posting their worst day since 2008. The Dow’s 2,013-point drop was also the biggest point drop for the 30-stock average ever.
The deep stock rout is putting the record-long bull market in jeopardy. With Monday’s drop, the S&P 500 is 19% below its intraday all-time high of 3,393.52 from Feb.19. The benchmark would fall into bear market territory if it slumps 20% from its peak or more.
Oil prices move higher
Meanwhile, oil prices saw some respite early Tuesday. As of 5:30 a.m. Tuesday, U.S. West Texas Intermediate crude futures were up 5.4% at $32.81 per barrel. International benchmark Brent crude futures added 5% at $36.10 per barrel.
That came after a shocking all-out oil price war roiled markets already on edge about the economic fallout from the fast-spreading coronavirus. Oil posted its worst day since 1991, with the WTI plunging more than 24% Monday, after Saudi Arabia slashed crude selling prices for April following the collapse in OPEC talks.
“The double-whammy of the continued problems from the coronavirus and the new oil price-war induced by the Saudis has caused stock markets around the globe to fall out of bed,” Matthew Maley, chief market strategist at Miller Tabak, said in a note Monday.
Monday’s monster sell-off triggered a key market circuit breaker that resulted in a 15-minute pause in trading early in the session.
Investors continued to seek safer assets amid additional fears that the coronavirus will disrupt global supply chains and tip the economy into a recession. The yield on the benchmark 10-year Treasury note dropped below 0.5% for the first time ever, while the 30-year rate breached 1%. At one point early Monday, the 10-year slid to 0.318%.
Earnings, data, Michigan votes
There are no major earnings reports scheduled for Tuesday. In terms of data, the NFIB small business index is due at 6 a.m. ET.
Meanwhile, the race for the White House continues in Michigan on Tuesday evening. The state is a watershed moment in the Democratic primary race.
—CNBC’s Eustance Huang contributed to this report.
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Dow futures point to opening bounce of 1,000 points after Trump floats payroll tax cut - msnNOW
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