- Dow Jones futures were off by as much as 252 points Wednesday night.
- The Dow Jones index rallied in New York trading, capping off its first two-day winning streak since February.
- Despite some Republican opposition, the Senate voted to pass the Trump administration’s $2 trillion stimulus package late Wednesday.
Futures on the Dow and broader U.S. stock market tumbled in overnight trading Wednesday, as investors continued to dissect the Trump administration’s $2 trillion stimulus response to coronavirus.
Dow, U.S. Stock Futures Slide
Futures on all three major U.S. indexes declined in overnight trading, with the Dow Jones Industrial Average mini contract falling by as much as 252 points, or 1%. It would eventually reverse most of those losses and was last seen trading 0.4% lower.
S&P 500 futures were down 0.2%. Nasdaq futures also tumbled 0.2%.
The Dow and S&P 500 finished sharply higher in New York trading, marking their first back-to-back gains since February. Over those two days, the Dow climbed more than 2,600 points.
Senate Passes Stimulus Bill
The Senate has finally approved a proposed $2 trillion stimulus package designed to ease the economic burden brought on by the Covid-19 pandemic. The landmark legislation was passed just minutes before midnight.
House Majority Leader Steny Hoyer says the bill will move to the House on Friday.
The legislation aims to provide direct financial support to Americans whose employment has been directly impacted by coronavirus. It will also unlock hundreds of billions in loans to small and large enterprises.
As The Wall Street Journal reports, lawmakers were expected to vote on the bill Wednesday night but,
the procedure was delayed when rank-and-file members voiced objections…
Vermont Senator Bernie Sanders was among those who rejected the bill and even threatened to block its passage if major revisions weren’t made.
Some Republicans criticized the proposed legislation and at least four objected to it because it disincentivizes going back to work.
Despite these criticisms, a former member of the Trump administration believes $2 trillion might not be enough to avert economic catastrophe.
Gary Cohn, who once served as President Trump’s top aide, told CNBC on Wednesday that “you cannot overreact in this situation.”
Basically, Cohn believes Congress must “throw as much money as you can at the situation.”
Of course, Cohn didn’t address the long-term impact of running massive deficits and the need to perpetually borrow money to fund lucrative programs.
The Federal Reserve is also fueling American debt by keeping interest rates artificially lower. Several pockets of the U.S. economy and financial system are highly leveraged, raising the specter of a painful recession if and when those bubbles pop.
This article was edited by Josiah Wilmoth.
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Last modified: March 26, 2020 4:03 AM UTC