Dow rises a record 1,050 points, as US stocks stage a massive Boxing Day rebound after pre-holiday punishment

US stocks rebounded on Wednesday, staging one of the biggest rallies of the decade after coming within points of seeing the bull market end, with major indexes surging about 5 per cent and the Dow registering its biggest one-day point increase ever.

The Dow Jones Industrial Average jumped more than 1,050 points (4.98 per cent), and all but one member of the Standard & Poor’s 500 advanced, pushing that index up by 4.96 per cent. The tech-heavy Nasdaq rallied 5.84 per cent.

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Each index’s percentage gain was the best since 2009, the year the longest bull market on record began. Consumer shares paced the rally, with Amazon jumping 9.5 per cent after reporting record holiday sales. Energy producers surged as crude oil powered past US$46 a barrel, an increase of almost 10 per cent.

The surge pulled the S&P back from the edge of a bear market — defined as a decline of 20 percent from its peak — though 2018 is still shaping up to be the index’s worst year since the financial crisis of a decade ago.

US President Donald Trump said a day earlier that the rout that took stocks down provided a “tremendous opportunity to buy.” Investors also welcomed the assurance by Kevin Hassett, the chairman of the White House’s Council of Economic Advisers, that Jerome Powell’s job as head of the Federal Reserve was “100 per cent” safe. Oil’s best rally since 2016 added to the equity surge.

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“It was probably a pretty good retail-oriented holiday and that probably has a lot to do with what’s happening today,” said Kim Forrest, a senior portfolio manager at Fort Pitt Capital Group.

“That the Fed chairman won’t be axed, that has a lot to do with everyone being happy Powell gets to keep his job and that the turmoil about this has abated for today. You have the market leaning one way or the other, and it can often do what it’s doing today, which is go higher. On Monday the market leaned lower. It’s an outsize move.”

Stocks are looking to stop one of the most miserable Decembers on record, as a host of headwinds combined to drag down America’s benchmark indexes. A reminder that consumers - a key part of the American economy - remain on solid footing helped soothe anxiety created by fears of a global slowdown and personnel churn in the US administration. Volume was in line with the 30-day average.

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Hassett was the latest government official to try to calm the markets after reports on Friday that Trump had made inquiries about firing Powell, whom he had chastised in tweets for making moves at the Fed he blamed for the market’s slide. US Treasury Secretary Steven Mnuchin was criticised for saying over the weekend that he called bank chiefs to gauge liquidity. Trump expressed confidence in Mnuchin on Tuesday.

The US dollar was stronger versus its major peers and Treasuries fell. Exchanges throughout Europe were closed for the day-after-Christmas holiday.

Elsewhere on Wednesday, Japanese equities closed higher on a wave of late buying after fluctuating throughout the day. South Korean shares tumbled after a holiday, and Shanghai stocks fell for a second day. Markets in Australia and Hong Kong were closed.