© Reuters. © Reuters.

By Noreen Burke

Investing.com – U.S. stock futures pointed to a bounce at the open on Tuesday, rebounding from a 7% slump a day earlier, as hopes for stimulus measures eased investor fears over a global recession in the face of the coronavirus epidemic.

By 07:25 AM ET (1125 GMT), added 992 points, or around 4.1%. were up 4.2% and were up a similar amount.

Yields on benchmark U.S. Treasury debt more than doubled to 0.70% and those on German jumped around 20 basis points as investors pared some safe-haven holdings.

The gains came after the three major indices posted their biggest one-day percentage decline on Monday and the tumbled as much as 2,000 points, as markets went into panic mode over the expected economic fallout from the coronavirus outbreak. Market sentiment was also hit by plunging oil prices following the breakdown of a crucial global oil pact.

But signs of policy action by the world’s major economies to cushion the effects of the rapidly-spreading virus eased investor nerves over the prospects of a recession.

U.S. President Donald Trump on Monday to take “very major” steps to protect the economy and float the idea of a payroll tax cut with congressional Republicans.

Japan said it would spend another 430.8 billion yen ($4.1 billion) to ease the effects of the coronavirus outbreak and Italy’s deputy economy minister announced that mortgage payments would be suspended as the country deals with the second-highest number of cases outside China.

Some of the biggest global investment banks, including JP Morgan, Citi and Barclays, now expect the Federal Reserve to cut U.S. interest rates to zero in the coming months as part of a mass global move to provide some ballast and liquidity to the financial system.

Elsewhere, futures rebounded 9.6% after falling by as much as 30% on Monday. That comes after reports saying that Saudi Arabia plans to sell some 12.3 million barrels of oil a day in April. Given that it is unlikely to be able to ramp up all its spare capacity so quickly, the reports suggest that the kingdom is planning to draw down stocks to maximize sales volumes – an extreme measure that is unlikely to be sustained. 

–Reuters contributed to this report

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.