Stock Market Futures: Dow, S&P 500, NASDAQ Rally After Biden Super Tuesday Win

Wall Street appeared relieved at former vice president Joe Biden's unexpectedly huge win on Super Tuesday with a rise in stock futures heralding a recovery Wednesday from the equities battering of the previous day.

Biden’s astounding comeback win dimmed the chance democratic socialist senator Bernie Sanders from Vermont would win Super Tuesday in a walkover, cementing his chance of becoming the presidential nominee of the Democratic Party. Sanders' socialist agenda, which includes heavily taxing the rich, is widely opposed on Wall Street.

Biden's big win saw futures on the benchmark S&P 500 expiring in March increase more than 1% after the index plummeted 2.82% Tuesday as part of a wider market rout. The welcome uptick erased a loss of as much as 0.7% and came after Biden won eight states in the Super Tuesday delegate race. Futures on the Dow and the NASDAQ both gained more than 1.2%.

“The market looks at the outcome of Joe Biden posting a strong showing this Super Tuesday as preferential,” according to Jerry Braakman, chief investment officer of First American Trust in California. “Biden would be a less severe change for markets that already have enough to worry about, with all these external shocks.”

The huge Tuesday selloff wasn't supposed to have occurred, judging by rosy Tuesday futures. An initial 400 point surge by the Dow Jones Industrial Average early in Tuesday trading held out hope the forecast might be mistaken. The Dow spiked at the start but this short-lived rally fizzled even after news of the U.S. Federal Reserve's first emergency rate cut since the Great Recession of 2008 failed to stem investor flight to U.S. Treasurys and gold.

The renewed bloodbath Tuesday saw the Dow plummet 785.91 points for a 2.94% loss and sinking to 25,917.41. The NASDAQ Composite was down 268.08 or 2.99% at 8,684.09. Investors again fled to the safety of Treasurys and gold. The renewed flight to Treasurys pushed the benchmark 10-year yield below 1% for the first time ever. On the other hand, gold jumped 2.9% to $1,644.40 per ounce.

Analysts said the renewed market rout and selloff confirms investor fears the COVID-19 outbreak is raging out of control outside China and is spreading fast inside the United States.