The stock markets rebounded on Tuesday, beginning the upside track. U.S. futures skyrocketed. The Dow Jones Industrial Average rallied by 11.4%. The S&P 500 also soared, rising by 9.4%.
Furthermore, Dow futures added 1.3% on Wednesday, and S&P was 0.1% higher. Before rising, the U.S. stocks traded into bearish territory due to the coronavirus pandemic. This new rally is due to Congress closing in on an unprecedented spending bill to boost the U.S. economy.
Equivalent losses immediately followed the S&P 500’s last three surges of more than 5%, but this time could be different, according to Sundial Capital Research Inc.
American futures haven’t seen a two-day rally since Feb. 12. Larry Peruzzi, Mischler Financial’s Director of International Trading, thinks that two days of back-to-back gains would be a “great signal” for stocks.
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What do the Analysts Say?
According to Chris Murphy, Susquehanna International Group LLP strategist, the investors were busy buying exposure to encourage price swings in an index and exchange-traded-fund products.
The S&P 500 futures slid slightly in early Asia trading on Wednesday. But Murphy noted that some of the largest one-day rallies in S&P’s history took place during bear markets. One-day pops are more or less common in a down market, so it’s not the reason to worry just yet.
Sundial Capital Research’s founder Jason Goepfert highlighted that the buying interest and stocks’ closed at highs on Tuesday. He thinks that it may be enough to change sentiment and string together some up days finally. And if the investors manage that, it could mean that the worst of the selling is behind.
There is a big chance of that, but investors are still cautious due to the several signs. Even though April futures on the Cboe Volatility Index dropped down on Tuesday, a gauge of volatility on the VIX rose higher. That isn’t an entirely good sign. However, analysts are inclined to offer more assurances thus far, then negative prognosis.