U.S. stocks rallied Wednesday after England’s central bank announced plans to buy government bonds to calm markets roiled by the country’s recent tax cuts.
The Dow Jones Industrial Average rose 546.77 points, or 1.88%, to 29,681.76. The S&P 500 rose 71.38 points, or 1.96%, to 3,718,67, and the Nasdaq Composite was up 222.13 points, or 2.05%, to 11,051.64.
The rally helped turn around a week of steady declines in markets concerned about inflation and recession. U.S. markets continued the selloff on Friday after the new British government announced a series of tax cuts that included breaks for corporations and new home buyers.
“Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,” the U.K. central bank said in a statement Wednesday explaining its bond buyback plan. “This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy.”
Some analysts and investors remain pessimistic about the U.S. economy.
“Our central case is a hard landing by the end of 2023,” billionaire investor Stanley Druckenmiller told CNBC on Wednesday. “I will be stunned if we don’t have recession in 2023. I don’t know the timing but certainly by the end of 2023. I will not be surprised if it’s not larger than the so-called average garden variety.”
Shares of Biogen (BIIB) surged $78.82, or 39.85%, to close at $276.61 after the company announced positive results from a late-stage test of its Alzheimer’s Disease drug candidate.
Biogen’s announcement also lifted other pharmaceutical companies pursuing their own Alzheimer’s treatments. Shares of Eli Lilly (LLY) rose $23.06, or 7.41%, to $334.16.