America has unveiled a stimulus deal, billed as a $2 trillion package, that is expected to include $500 billion in direct payments to people and $500 billion in liquidity assistance.
The announcement caused commodities to recover and world stocks to increase by 11% as markets rallied following the news of a US fiscal stimulus package.
The move increased hope that the economic devastation caused by the pandemic can be alleviated and caused markets to see their first back-to-back gains in a month as volatility and turbulence backed away from full-blown crisis levels.
Senate Democratic Leader, Chuck Schumer, called the package “the largest rescue package in American history”. He said it was a “Marshall Plan” for hospitals and informed them that “help is on the way, big help and quick help.”
Republican Senate Majority leader, Mitch McConnell, described it as a “wartime level of investment” in the economy.
On Wednesday, main European markets such as London, Paris and Frankfurt all opened 4% – 5% higher after Tokyo’s Nikkei rose by almost 7% following some historic moves on Wall Street the day before.
The Dow Jones Industrial Average had soared by over 11% in its biggest one-day percentage gain since 1933 and the S&P 500 increased by 9.4% – its tenth best day on record out of 24,067 trading sessions since daily data started in 1927.