US stocks whipsawed after Washington reaches historic rescue deal

Wall Street was up and down on Wednesday after a historic surge in the previous session that saw the Dow Jones Industrial Average soaring more than 2,000 points in its best one-day percentage gain since 1933.

The Dow jumped 700 points from the opening bell before retreating into negative territory. The S&P 500 and Nasdaq Composite also traded lower.

On Wednesday, the US Senate and the White House reached a deal on a massive $2 trillion relief bill to combat the economic impact of the coronavirus outbreak.

“At last we have a deal,” said Republican Senate Majority Leader Mitch McConnell following the agreement of the coronavirus stimulus deal. “In effect, this is a war-time level of investment into our nation.”

Democratic Senate Minority Leader Chuck Schumer added: “This is not a moment of celebration but one of necessity.”

In an interview with CNBC on Wednesday, former Federal Reserve Chairman Ben Bernanke raised the possibility of a “very sharp short recession” followed by a quick rebound.

“If there’s not too much damage done to the workforce, to the businesses during the shutdown period, however long that may be, then we could see a fairly quick rebound,” Bernanke said.

According to Goldman Sachs, the “swift and large” global policy response could help steady markets, but commitments may need to get even bigger before that happens.

It has warned that major risks remain, particularly on theunemployment front. If joblessness shoots up then companies could wind up shorton cash as demand falters even more. That will raise the chances that therecession “becomes more entrenched,” Goldman said.

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