Dow futures initially surged but were last down 142 points, or 0.7%, suggesting the index would sink following a rally on Tuesday that saw it notch up its biggest point gain on record and its biggest percentage increase since 1933. Nasdaq and S&P 500 futures also pointed lower.
The stimulus package, which still needs to be approved by Congress, would be the most significant legislative action taken by the United States to address the rapidly intensifying coronavirus crisis, which is overwhelming hospitals and slamming the brakes on much of the economy.
The full details have yet to be released. But $250 billion has been set aside for direct payments to individuals and families, while $350 billion will be used for small business loans and $250 billion will fund unemployment insurance benefits. Some $500 billion is allocated for loans for distressed companies.
“Coming on the heels of the central banks, there is increasing optimism that politicians are starting to understand the scale of the economic stop coming our way, as the death toll across Europe and the US continues to rise,” wrote Michael Hewson, chief market analyst at CMC Markets UK, in a research note.
Recent upswings “could well be another bull trap, and an opportunity to sell at better levels, if politicians disappoint,” Hewson added.
— CNN’s Manu Raju, Ted Barrett, and Kristin Wilson contributed to this report.