U.S. stocks staged one of the biggest rallies of the 9-1/2 year bull market after coming within points of seeing it end, with major indexes surging at least 4.9%. Crude jumped almost 10%.
All but one member of the S&P 500 advanced, the Dow Jones Industrial Average jumped more than 1,050 points and the Nasdaq 100 rallied 6%. Each gain was the best since 2009, the year the longest bull market on record began. Consumer shares paced the rally, with Amazon jumped 9.5% after reporting record holiday sales. Each member of the FAANG cohort rallied at least 6.4%, while energy producers surged as crude powered past $46 a barrel.
President Donald Trump said a day earlier that the rout that took stocks down 19.8% from a record provided a “tremendous opportunity to buy.” Investors also welcomed Kevin Hassett’s assurance that Jerome Powell’s job is “100 percent” safe. Oil’s best rally since 2016 added to the equity surge.
“It was probably a pretty good retail-oriented holiday and that probably has a lot to do with what’s happening today,” said Kim Forrest, a senior portfolio manager at Fort Pitt Capital Group. “The thing that the Fed chairman won’t be axed, that has a lot to do with everyone being happy Powell gets to keep his job and that the turmoil about this has abated for today. You have the market leaning one way or the other, and it can often do what it’s doing today, which is go higher. On Monday the market leaned lower. It’s an outsize move.”
Stocks are looking to stop one of the most miserable Decembers on record, as a host of headwinds combined to drag down America’s benchmark index. A reminder that consumers — a key part of the American economy — remain on solid footing helped soothe anxiety created by fears of a global slowdown and personnel churn in the U.S. administration. A late report that a U.S. government delegation will travel to Beijing in two weeks to hold trade talks gave stocks a final push higher.
Hassett was the latest government official to try to calm the markets after Bloomberg’s report Friday that President Donald Trump asked about firing Powell. Steven Mnuchin was criticized for saying he called bank chiefs to gauge liquidity. Trump expressed confidence in Mnuchin yesterday.
Crude surged, the greenback was stronger versus its major peers and Treasuries fell. Exchanges throughout Europe remained closed for the holiday.
Elsewhere on Wednesday, Japanese equities closed higher on a wave of late buying after fluctuating throughout the day. Korean shares tumbled after a holiday, and Shanghai stocks fell for a second day. Markets in Australia and Hong Kong were closed.