Stock futures turned negative in early Wednesday morning trading, following Tuesday’s historic rally, as the White House and Senate reached a deal on a coronavirus stimulus bill.
Around 7 a.m. ET, futures on the Dow Jones Industrial Average pointed to a loss approaching100 points at the Wednesday open. S&P 500 and Nasdaq-100 futures both were negative. Dow futures were up more than 800 points at one point in the overnight session.
The moves came after the White House and Senate leaders agreed on a massive $2 trillion coronavirus stimulus bill.
“At last we have a deal,” Republican Senate Majority Leader Mitch McConnell said around 1:37 a.m. ET from the floor of the Senate. “In effect, this is a war-time level of investment into our nation.”
Democratic Senate Minority Leader Chuck Schumer said, “This is not a moment of celebration but one of necessity.”
Ahead of the news, Dow futures had pointed to an opening drop of about 200 points, while S&P 500 and Nasdaq-100 futures also pointed to losses at the Wednesday open.
The action in the futures market followed an epic comeback on Wall Street. The Dow soared more than 2,100 points, or over 11%, notching its biggest one-day percentage gain since 1933 and its best point increase ever. The S&P 500 rallied 9.4% for its best day since October 2008.
Even with Tuesday’s massive rebound, some on Wall Street struggle to see the light at the end of the tunnel, especially without a clear sign that the coronavirus outbreak will be contained soon.
“This was a one-day bull market,” CNBC’s Jim Cramer said on “Closing Bell” on Tuesday. “You had stocks that moved so much they basically moved as if the second half of the year is going to be good. I struggle to find out why the second half of the year should be good …I hate this kind of rally. This was a machine-driven rally, just like the sell-offs … I want to wait to see.”
Last week, the Cboe Volatility Index (VIX), also known as Wall Street’s fear gauge, eclipsed its financial crisis high and closed at 82.69. As of Wednesday morning, it was still hovering around a still-high 60 level.
Meanwhile, the coronavirus cases in the U.S. and globally still haven’t shown a sign of peaking. More than 400,000 cases have been confirmed worldwide, including over 50,000 in the U.S., according to Johns Hopkins University. So far, more than 600 deaths related to the coronavirus have been confirmed in the U.S. New York City reported nearly 15,000 cases Tuesday and 131 related deaths.
Some investors believed the stock market was overdue for a big bounce, having priced in a worst-case scenario regarding the economic damage being done by coronavirus-related shutdowns. They believe a bounce could occur here even as coronavirus cases continue to surge because the market was so oversold.
—CNBC’s Jesse Pound contributed reporting.