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US stocks rebound slightly amid hopes for government stimulus

US stocks rebounded somewhat Tuesday from Monday’s historic crash on renewed hopes for government stimulus to combat the coronavirus.

The Dow Jones industrial average ended the day up 1,167.14 points, or 4.89 percent, to 25,018, after plummeting by more than 2,000 points on Monday in its worst point decline ever.

The gains are the result of a rollercoaster day that started with the Dow rising more than 900 points in early trading on stimulus hopes — only to give up the gains on concerns that the White House plan remained vague.

Stocks waned, for example, after CNBC reported that the White House was not ready to announce a specific economic plan.

“A lot of details need to be worked out,” one official told the network.

The deflation wasn’t helped by news reports that Trump spoke with Saudi Crown Prince Mohammed bin Salman early Tuesday before Saudi Arabia announced that it would boost its crude oil supply to record highs next month — raising concerns about the US’s ability to influence oil production.

On Monday, the Dow shed more than 2,000 points and the S&P suffered its worst day since December 2008 after Saudi Arabia said it would boost oil production and slash prices, which caused crude oil prices to plummet.

The nascent price war has only served to exacerbate fears about the coronavirus outbreak damaging the global economy.

Investors lifted stocks once again leading to the close amid reports that Trump had pitched the 0-percent payroll tax rate during a meeting with Republican lawmakers on Capitol Hill on Tuesday.

The proposed tax cut would last at least through the rest of this year, an anonymous White House official told CNBC.

Crude oil also recovered Tuesday, with Brent crude futures recently jumping 9.9 percent, to $37.77, a barrel. West Texas Intermediate futures were recently up 11 percent, at $34.56 a barrel, after plunging 25 percent Monday.

“In times of turmoil, nothing is more important in restoring confidence, than the government appearing calm and in control of the situation, [however] tenuous that control may be,” Jeffrey Halley, senior currency analyst at OANDA, wrote in a Tuesday commentary.

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