Wall Street futures tick up sharply as Biden sweeps southern states

Joe Biden

Futures point to a positive open

U.S. stock index futures pointed to a higher open on Wednesday, after Democratic presidential candidate Joe Biden bounced back on Super Tuesday with huge wins in key southern states, thanks in part to overwhelming support from African American voters and the moderate wing of his party.

The former vice president recorded victories in Alabama, Texas, Arkansas, Minnesota, Tennessee, North Carolina, Oklahoma, Virginia, and Massachusetts. Meanwhile Senator Bernie Sanders won in his home state of Vermont, Colorado, Utah, and delegate-rich California.

Former New York Mayor Mike Bloomberg and Massachusetts Senator Elizabeth Warren fared poorly. Traders are still awaiting results from Maine, which is currently too close to call.

As of 4:20 a.m. ET, the blue-chip Dow futures gained 506 points, or 1.96% to 26,386. The S&P 500 futures were up 52.38 points, or 1.75% to 3,049.38 while the tech-heavy Nasdaq 100 futures rose 161.75 points, or 1.88% to 8,744.25.

Fed cuts interest rates by half a percentage point

The U.S. Federal Reserve slashed interest rates by 50 basis points to a range between 1% and 1.25% on Tuesday, in an attempt to shield the economy from the novel coronavirus outbreak.

This was the biggest single cut since the financial crisis in 2008 and the first emergency rate cut since. The Fed said that although the fundamentals of the U.S. economy remain strong, the coronavirus poses evolving risks to economic activity.

“The Committee is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy,” the central bank said in a statement.

The emergency rate cut initially pushed the U.S. stock market higher on Tuesday, before resulting in a massive sell-off.

Several central bankers and political leaders around the world have also expressed their willingness to contain economic impacts of the coronavirus. Earlier on Tuesday, the Bank of England’s governor signaled the bank is prepared to support the economy.

Japan injected liquidity into its financial system for a second day, and central banks in Malaysia and Australia cut interest rates. The Bank of Canada is also widely expected to announce a cut of 25 basis points to 1.5% from 1.75% later in the day.

Facebook gives WHO unlimited free ads to fight coronavirus misinformation

Meanwhile, Facebook (NASDAQ: FB) CEO Mark Zuckerberg has announced that the company will provide free advertisements to the World Health Organization (WHO) as it seeks to make sure users are not misinformed about the virus and how to react to it.

“We’re giving the WHO as many free ads as they need for their coronavirus response along with other in-kind support,” Zuckerberg said on Tuesday. “We’ll also give support and millions more in ad credits to other organizations too and we’ll be working closely with global health experts to provide additional help if needed.”

Last month, the social media company said it would block ads for products that create a sense of urgency about the outbreak for commercial gain, and those mentioning the virus in relation to prevention or cures.

Separately, Amazon (NASDAQ: AMZN) has confirmed that an employee based in Seattle has tested positive for the virus. “We’re supporting the affected employee who is in quarantine. The employee is based out of Amazon’s Brazil office building in Seattle, WA,” the company was quoted as saying by CNBC.

The illness, thought to have originated in the central Chinese city of Wuhan, has so far infected more than 93,000 people and killed over 3,000 across almost 70 countries.