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European stock markets posted strong gains on Wednesday, alongside U.S. stock futures, after Senate members and lawmakers from the White House administration reached agreement over a $2 trillion stimulus package to shore up the economy against the coronavirus.
The Stoxx Europe 600 index SXXP, +3.49% climbed 4.2% to 316.61, and was poised for its second consecutive positive day after Tuesday’s 8.4% surge, which marked the biggest one-day percentage gain since November 2008. A roller-coaster ride for investors this week — Europe stocks fell 4.3% on Monday — has been driven by the U.S. struggles to pass much-needed legislation to protect workers and the economy from the virus outbreak.
After marathon talks into the early hours of Wednesday, the Senate and the White House reached agreement over a $2 trillion stimulus package to shore up the economy against coronavirus. The Senate reconvenes at noon and is expected to easily pass the legislation, which will then go to the House of Representatives.
The Dow DJIA, +11.37% posted its best one-day gain on Tuesday since 1933 on optimism U.S. lawmakers would reach a deal. Dow Jones Industrial Average futures YM00, +2.71% climbed 524 points, or 2.7%, to 20,918, while S&P 500 futures ES00, +1.42% gained 1.5% to 2,475. Nasdaq-100 futures NQ00, +1.53% gained 1.7% to 7,678.75.
“The only worry is, if the measures announced in the last few days – that is, the Fed’s unlimited QE and this $2 trillion plan – don’t create a sustained rebound, it is unclear what will,” said Connor Campbell, financial analyst at SpreadEx.
“There are always the plans the G-7 hinted at on Tuesday, though given the level of international cooperation required for that, who knows when they will materialize,” said Campbell, in a note to clients.
Elsewhere, the German DAX index DAX, +3.13% gained 4.2%, the FTSE 100 index UKX, +3.60% rose 4.8% and the FTSE MIB Italy Index I945, +3.32% surged 5%.
Europe’s gains came even as the coronavirus death toll in Italy, the epicenter of Europe’s outbreak, shot back up on Tuesday after two straight days of declines. The rate of infections, however, appear to have stabilized in that country, which is being viewed as a positive development. Elsewhere, Spain posted its largest death toll in a single day since its outbreak began on Tuesday.
Read: More than a week into its lockdown, Spain longs for the coronavirus to loosen its deadly grip
There were sharp gains across the board for a range of sectors, with a 9% jump for major oil company BP PLC BP, +21.61% BP, +8.82% as U.S. CL.1, +1.21% and Brent prices BRN.1, -0.11%, rising over 2% and 1%, respectively. Shares of Royal Dutch Shell Group RDS.A, +19.68% RDSA, +5.97% gained 6.4%.
Shares of luxury-goods maker LVMH Moët Hennessy Louis Vuitton SE MC, +5.12% gained 4.% and drugmaker GlaxoSmithKline PLC GSK, +6.75% GSK, +3.84% rose 5.5%.
