Futures contracts tied to the major U.S. stock indexes surged in early trading Tuesday

Posted on March 24, 2020

Dow Jones Industrial Average futures jumped 930 points, or 5%, and briefly hit so-called limit up levels. S&P 500 futures and Nasdaq futures were also up 5% and reached “limit up.” The S&P 500 SPDR ETF was up 4.9% in premarket trading.

Senator Charles Schumer and Treasury Secretary Steven Mnuchin said they hope to have a deal by Tuesday morning. “There are still a few little differences. Neither of us think they are in any way going to get in the way of a final agreement,” Schumer said.

The futures contracts cannot trade once they exceed certain extreme bands, according to rules of the exchange to curb volatility. No activity can take place outside of those bands, in this case, up 5%. During this historic market plunge this month, the futures have often been halted for being “limit down,” off by more than 5%.

Tuesday’s moves followed yet another stormy day on Monday as investors swung back to pessimism and pushed the major indexes to new multiyear lows as a procedural vote in the Senate on a bill failed for the second time in 24 hours.