The U.S. stock market saw a sudden upsurge on Monday, March 2, after a gloomy week over the fear of coronavirus outbreak, reported Breibart.
The Dow recorded 26,703.32 points, an increase of 5.1 percent, the highest point for a decade. The S&P 500 Index also climbed 4.5 percent, the best ever since 2018. The Nasdaq Composite shared the same trend with an increase of 4.5 percent.
The positive sign in the market comes as investors expect incentives from the Federal Reserves and other global banks to stimulate the economy amid the wide and speedy spread of the coronavirus.
The coronavirus concern has loomed over the global market as the disruption to supplies and sales channels is indispensable when the second largest world economy has been hit hard by the epidemic.
Federal Reserve Chairman Jerome H. Powell said last week, “The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.”
He was criticized by President Trump just yesterday for his hesitation to take prompt measures to accommodate the challenging moment.
Goldman Sachs Group Inc. GS, +4.33% economists on Sunday predicted the Fed would cut rates, possibly before its next policy meeting, scheduled for March 16-17, said Market Watch.
Meanwhile, other countries have taken steps to avert a financial meltdown. The Reserve Bank of Australia has reduced interest rates by a quarter percentage point to 0.05%, the lowest point ever, according to the Wall Street Journal.
The European Central Bank president also indicated a readiness to “take appropriate and targeted measures as necessary.”
Bill Nelson, the chief economist at the Bank Policy Institute and a former Fed economist anticipated that by March 3, major central banks could announce coordinated interest rate cuts, cited Fox News.
Bank of Japan Gov. Haruhiko Kuroda announced that the bank “will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases,” as well, reported Market Watch.
Along with financial measures, the Trump administration held meetings with heads of major pharmaceutical corporations to further the progress of producing a vaccine and disease cure.
It has certainly sparked more hope of minimizing the downside effect that the epidemic would pose to the U.S. economy in particular and the global economy in general.