The U.S. stocks rallied after the long weeks of downfall and losses. During the last month, the stock market was almost entirely bearish due to the coronavirus pandemic. Which caused a near paralysis of the whole countries and economies.
However, the markets are rebounding at last. The Dow Jones Industrial Average skyrocketed by 11.4%. The S&P 500 also hit high on Tuesday, rising by 9.4%, as Congress closed in on an unprecedented spending bill to boost the U.S. economy. Dow futures added 1.3% on Wednesday, and S&P was 0.1% higher.
Larry Peruzzi, MischlerFinancial’s Director of International Trading, noted that just two days of back-to-back gains would be a “great signal” for stocks. American futures haven’t seen a two-day rally since Feb. 12.
Furthermore, the S&P 500’s last three surges of more than 5% were immediately followed by equivalent losses. According to Sundial Capital Research Inc., though, this time could be different. Due to a record surge of stocks trading on an uptick on Tuesday.
Founder Jason Goepfert stated that the buying interest and stocks’ closed at highs on Tuesday. Moreover, it could be enough to change sentiment and string together some up days finally. If the investors manage that, it could mean that the worst of the selling is behind. Well, at least for a couple of months, according to historical precedents.
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Does it mean that the stocks will continue rally?
Even though there is a big chance of that, 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.
Chris Murphy, Susquehanna International Group LLP strategist, noted that the investors were busy buying exposure to encourage price swings in an index and exchange-traded-fund products.
Meanwhile, the S&P 500 futures lowered slightly in early Asia trading on Wednesday. However, according to Murphy, some of the largest one-day rallies in S&P’s history took place during bear markets, and one-day pops are not uncommon in a down market.