Stocks rose for the first time this week on Wednesday, getting a boost from rebounding oil prices and news that the Senate passed a $484 billion coronavirus relief package to provide additional funding for small businesses, hospitals and coronavirus testing.
The Dow Jones Industrial Average was up almost 2%, around 450 points, on Wednesday, while the S&P 500 rose 2.3% and the Nasdaq Composite gained 2.8%.
Oil prices staged a rebound on Wednesday, reversing some of the unprecedented losses from earlier this week: WTI crude oil futures for June stabilized, rising 20% to around $14 per barrel.
The June futures contract had fallen more than 40% on Tuesday amid plummeting global demand, a day after WTI futures for May plunged below zero for the first time in history—meaning that sellers were essentially paying buyers to take oil off their hands.
President Trump’s chief economic advisor, Larry Kudlow, told CNBC on Wednesday that the price of oil should recover over the next several months as the economy starts to reopen and coronavirus lockdown measures are lifted.
U.S. Treasury Secretary Steven Mnuchin said later on Wednesday that he expects most, if not all, of the U.S. economy to be open by “later in the summer.”
Stocks also moved higher thanks to Congressional leaders—after days of tense negotiations—finally reaching a bipartisan deal to replenish funds for emergency small business lending programs, national coronavirus testing and hospitals.
The $484 billion bill passed the Senate on Tuesday evening, with the House expected to approve the legislation as early as Thursday.
“This week investors are realizing that even though the crisis could soon get better, the negative impacts of having an economy which is essentially shut down are magnifying at an alarming rate,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC on Wednesday.
Several companies got a boost from beating earnings expectations after the market closed Tuesday. Shares of Chipotle Mexican Grill were up 12% on Wednesday, while Snapchat stock jumped 36%.
Wednesday’s rally follows two straight days of losses for the market. The Dow fell 2.2% and the S&P 500 lost 1.6%. on Monday, as oil futures for May turned negative. On Tuesday, stocks continued to fall—the Dow was down 2.7% and the S&P 500 lost 3.1%—thanks to the historic sell-off in oil prices.