Stock market futures surge after Fed takes major action to support economy

S&P 500 futures fell by 5%, the limit at the open on Sunday

U.S. equity futures turned higher Monday morning after the Federal Reserve announced a major expansion of its lending facilities.

The Federal Reserve said Monday it would buy assets “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy."

Dow Jones Industrial Average futures were trading up 400 points, or about 2 percent, after having risen by as much as 700 points. Futures fell by as many as 954 points on Sunday evening. S&P 500 futures, which fell by the limit 5 percent, were up 2 percent.

On Sunday evening, Congress continued to grapple over the details of a third COVID-19 stimulus package as millions of Americans remained isolated at home in an attempt to combat the disease.

Top-level negotiations between U.S. Congress and the White House continued after the Senate voted against advancing the $2 trillion economic rescue package.

The Democrats said the bill was tilted too much toward aiding corporations and would not do enough to help individuals and healthcare providers.

The reversal comes after the major averages last week suffered through their sharpest weekly drop since the 2008 financial crisis as more industries instituted massive layoffs and business slowed to a near standstill.

The Dow Jones Industrial Average last week tumbled 4,011 points, or 17.3 percent, while the S&P 500 and Nasdaq Composite lost 14.98 percent and 12.64 percent, respectively.

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Treasury Secretary Steven Mnuchin told Fox News' John Roberts on Sunday morning the third stimulus package will have four components, consisting of small business retention loans that will provide two weeks of cash flow to pay workers and some overhead, direct deposits amounting to approximately $3,000 for a family of four, enhanced employment insurance for those who are laid off and up to $4 trillion to support the economy.

He added there is a "significant amount of money" for hospitals and medical professionals.

COVID-19, which has caused eight states to issue "stay-at-home" orders, has infected more than 32,700 people in the U.S. and killed 409, according to the latest figures provided by Johns Hopkins University & Medicine. One hundred seventy-people have recovered.

West Texas Intermediate crude oil futures for May delivery plunged before paring that loss to 0.6 percent at around $22.48 per barrel while gold futures for June delivery traded up by nearly the same amount at $1,498 an ounce.

In Europe, London's FTSE fell 4.4 percent, Germany's DAX declined 3.8 percent and France's CAC dropped 3.5 percent.

In Asian markets, Japan's Nikkei added 2 percent, Hong Kong's Hang Seng fell 4.9 percent and China's Shanghai Composite declined 3 percent.