U.S. stock futures jumped Wednesday, buoyed by Super Tuesday primary results that showed former Vice President Joe Biden was poised to retake the lead for the Democratic nomination.
Dow futures rallied 700 points while Standard & Poor’s 500 futures climbed 2.4%.
Biden capped a strong Super Tuesday by winning Texas, the third-largest overall prize in the Democratic primaries, and at least eight other states. Bernie Sanders, a strong critic of Wall Street, won the biggest prize of Tuesday’s primaries with a victory in California.
The gains came following a day of wild swings Tuesday after a surprise decision by the Federal Reserve to cut interest rates by half a percentage point. The move was aimed at defusing fears the coronavirus outbreak might stunt global economic activity.
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The U.S. rate cut was the Fed’s first outside a regularly scheduled meeting since the 2008 global crisis. That prompted some traders to think the Fed might foresee an even bigger economic impact than markets fear.
“If the coronavirus has taught us anything, it’s that markets can be impacted by unexpected factors quickly and dramatically and that it’s important for investors to be prepared,” Randy Swan, chief executive and lead portfolio manager at Swan Global Investments, said in a note.
On Tuesday, the Dow Jones industrial average dropped nearly 800 points while the 10-year Treasury yield dipped below 1% for the first time. The yield on the 10-year Treasury was at 0.95% early Wednesday.
U.S. markets have fallen 11% since setting a record two weeks ago.
China, Australia and other central banks also have cut rates to shore up economic growth in the face of anti-virus controls that are disrupting trade and manufacturing. But economists warn that while cheaper credit might encourage consumers, rate cuts cannot reopen factories that have closed due to quarantines or lack of raw materials.
Global stock markets were mixed Wednesday. London opened lower while Germany advanced. Shanghai gained, Sydney and Hong Kong declined and Tokyo was little-changed.
The Associated Press contributed to this article.