Just after nose dive of the DOW index in that past few days, on Tuesday the index finally breathe relief. The White House and Federal Bank both have come to terms with the fact that the market needs a financial boost and hence the declaration of $1 trillion stimulus into the market has given the stock market the much-needed support.
When the closing bell rang on Tuesday, the index was up with 1049 points or 5.2% while the S&P 500 showcased a gain of around 6% on the day. The emergency stimulus package from Trump’s administration helped the stock market to get back to its feet to a certain extent. The $1 trillion package is aimed to help Americans get loans as well as small businesses to have some financial support to perform well in the market. This is a unique situation in the state and this is why such measures are being taken to make sure that the economy is at par and not dropping any further.
The short-term credit program from the US government will help businesses withstand the dreadful impact of COVID-19. The credit layout plan will be implemented in the coming two weeks and also those who have their pending payments towards the Internal Revenue Service will be given an additional period of 90 days to clear the same.
However, the airline industry expected to receive a $50 billion help so that they can fight this battle of constant cancelations and travel ban. Keeping such condition of the economy in mind, the FED had also dropped down its interest rate to nearly zero on this Sunday. The central bank has also infused billions of dollars into the banking system to ensure that the credit cycle is constantly flowing
Now that the government has ordered a complete stay at home measure for all the citizens, businesses such as theatres and restaurants have completely gone shut. This will harm the overall economy and hence they are more focused on extending the credit line to these businesses to stabilize them. On Monday, DOW faced its biggest drop since 1987’s black Monday. DOW Jones lost around 13% on the day and the single-day loss of around 2997 points was the biggest in the history of the index. Markets in Europe, Asia, and Australia showcased mixed reports on the day but it is expected that the boom in the US Stocks will help them gain certain stability at this point.