Stock Market Futures: Dow Up 300 Points As Trump Reveals Payroll Tax Cut Plan

Market futures early Tuesday (March 10) morning seem to herald a rally of sorts after the Dow Jones Industrial Average and the S&P 500 Monday took the worst beating since the Great Recession of 2008.

Dow futures as of 12:49 a.m. ET Tuesday surged 669 points, indicating an opening jump of more than 710 points. S&P 500 futures and Nasdaq-100 futures also pointed to a higher opening. Dow futures were down more than 400 points early in the session but recovered and were on a climb.

The turnaround, which erased part of the huge losses, came after President Donald Trump floated the idea of “a payroll tax cut or relief” to offset the negative impact from the COVID-19 outbreak spreading fast in the United States.

Trump said he'll meet with Senate and House Republicans Tuesday to discuss “a possible tax relief measure” to provide “a timely and effective response to the coronavirus.” The potential tax incentives come on top of an $8.3 billion spending package Trump signed last week.

Some economists and Wall Street analysts, however, contend throwing money at a medical and not a financial problem is next to useless. Some economists question if typical stimulus measures will work during a medical crisis, such as COVID-19, that's forcing consumers to stay at home and not go out and spend whatever money that they gain from a payroll tax cut.

This means even with more money, Americans likely won't be spending it at restaurants, on entertainment, on travel and on activities outside their home when their health remains at risk.

Trump also said the White House will work with the airline and cruise ship industries in response to the outbreak that's hit these industries especially hard.

The hope among investors now is this futures rally Tuesday mimics that of March 1 (Sunday). On that day, a moderate rally predicted by stock futures turned into a major one Monday with all three indices finishing more than 4% above their closings Friday. The three also exited correction territory into which they had plunged during Wall Street’s worst week since 2008.

The Dow led the rally, closing 1,284 points higher, or up 5.1%, to 26,693.84 points. Monday's rally was the best one-day point gain in Dow's history. That record stood in stark contrast to the 1,190 point loss the index suffered on Feb. 25, the largest single-day loss in its history. The Dow lost 3,500 points in five bloody days two weeks ago.

The S&P 500 gained 3,091 points to end 4.61% higher at 3,090.54 on March 2, while the Nasdaq Composite rose 4.49% to 8,952.16. These huge gains snapped seven-day losing streaks for the Dow and S&P 500.

The Dow, S&P 500, and the Nasdaq all fell more than 10% during the week of Feb. 23-29, their largest weekly declines since the Great Recession in October 2008.