“In case the generosity of the Fed was in any doubt, it is not. Global equity markets are recovering quickly,” after the Fed announcement,
Market players were also reassured by a
However, the central bank did expand its “Special Program,” including purchases of commercial paper and corporate bonds and its lending programs for commercial banks from
In a statement, the
Flexibility in thinking was key because of the uncertainties about the virus, he added.
“We don't know yet when a treatment or vaccine can be developed or become available,” he said.
Overnight, the Fed's move earlier brightened sentiment on
The move was the latest reminder the Fed is doing everything it can to help support markets, analysts said. Central banks have repeatedly come to the economy’s rescue over the years, and it was huge, unprecedented moves by the Fed earlier this year that helped put a halt to the S&P 500's nearly 34% sell-off on worries about the recession coming out of the coronavirus pandemic.
The S&P 500 rose 0.8% to 3,066.59, which is 9.4% below its record set in February.
The Dow Jones Industrial Average gained 0.6%, to finish at 25,763.16 after earlier falling as much as 762 points. The Nasdaq composite added 1.4% to 9,726.02.
“Volatility is here to stay, at least for a little while,” said
Still, the number of COVID-19 cases is still growing in states across the country and nations around the world. Governments are relaxing lockdowns in hopes of nursing their devastated economies back to life, but without a vaccine, the reopenings could bring on further waves of COVID-19 deaths.
That’s the biggest worry for markets: If infections swamp the world, governments could bring back the orders for people to stay at home and for businesses to shut down that sent the economy into its worst recession in decades. Even if that doesn’t happen, rolling waves of outbreaks could frighten businesses and consumers enough to keep them from spending and investing, which would itself hinder the economy.
“More importantly and something that seems to get lost in every rebound narrative is whether consumer behavior turns more cautious and inhibits a recovery in spending," said Innes of
Just a week ago, investors seemed ebullient with expectations for a recovery. Those hopes got a shot of adrenaline earlier this month when a report showed
That optimism sent the stock market on a second leg of its rally, which began in March after the
The dollar rose to
AP Business Writers