U.S. stocks swung between gains and losses Wednesday after lawmakers and the White House reached an agreement on a $2 trillion stimulus package, extending what’s been one of the market’s most volatile periods in recent memory.
Uncertainty about the pandemic and its trajectory, combined with a spike in trading volumes, have contributed to big moves across markets in the past few weeks—something analysts and investors say is likely to continue being common for the foreseeable future.
Investors have been eager to see the government commit to further aid for the economy as the growing coronavirus pandemic has shut factories, sent students home from universities and upended travel for millions of Americans. The pending legislation is likely to include direct financial checks to many Americans, as well as loans to businesses—reassuring to those who have been worried about the economic fallout from the pandemic.
It’s obviously a very significant package, unprecedented in peacetime, but the measure wouldn’t be enough to prevent output from contracting sharply in the second quarter. We’ve seen significant parts of the economy shut down, and there’s nothing that the Fed or fiscal stimulus can do to change that.
Globally, cases of infection surpassed 420,000 Wednesday, with more than 18,900 dead, as the disease reached far corners of the world including the U.S. territory of Guam.