Stocks rose Friday morning after suffering their worst day of losses since the 1987 stock market crash, giving Wall Street a brief reprieve from a steep sell-off and dour outlook.
The Dow Jones Industrial Average surged 1,000 points after trading opened Friday morning before settling with a gain of roughly 750 points, or 3.5 percent. The index closed with a loss of 2,352 points Thursday, dropping 10 percent for its steepest loss by percentage since falling 22.6 percent on Oct. 19, 1987.
The S&P 500 rose 3.9 percent after falling 9.5 percent Thursday, while the Nasdaq composite gained 4 percent after falling 9.4 percent at the end of the previous session.
Wall Street appeared to find solace in progress between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin toward a deal to bolster the federal government’s response to the coronavirus pandemic and efforts to protect the economy from its impact.
“It’s fair to say we’re close to an agreement, subject to the exchange of paper, and hope to have an agreement tomorrow,” Pelosi told reporters just outside her office in the Capitol on Thursday night.
“One way or another,” Pelosi said, there will be a vote Friday on a measure.
A spokesman for Pelosi said she and Mnuchin had spoken over the phone Friday morning.
Trump and lawmakers are scrambling to reach a deal to expand the country’s capacity to test for coronavirus, treat those who contract it and financially support businesses and workers most vulnerable to the escalating withdrawal from everyday life the outbreak has caused.
There are more than 1,000 confirmed cases of coronavirus in the U.S., claiming more than 30 lives. Public health officials have warned that those numbers are likely to climb significantly over the next two weeks, and are calling for dire measures to buy the health system time to handle the pandemic.
Health officials have advised Americans to limit their exposure to the virus and ability to spread it by avoiding large crowds, tight public spaces and close contact with other individuals. State and local governments have imposed strict restrictions on public gatherings, and major pillars of American cultural life are shuttering to help slow the spread of the virus.
The sharp decline in consumer spending and potential spike in unemployment driven by the suspension of professional sports and live music concerts, the closures of schools and offices, cancellation of events, and a standstill in travel have threatened to derail a once-study U.S. economy.
More than two-thirds of U.S. gross domestic product is driven by consumer spending, making a near-total shutdown of nonessential economic activity a potentially dire blow to the country.
“We have to get used to the fact that we are going into a global recession. Hopefully it will be short-lived, but I can’t see how we will avoid a global recession,” said Mohamed El-Erian, chief economic adviser to financial services firm Allianz, in an CNBC interview on Friday.
–Updated at 10:15 a.m.