All three main indexes had snapped higher in early trading following reports that US politicians had reached a deal on a stimulus package to aid businesses and millions of individuals hit by the economic fallout of the outbreak.
But fears about a looming global recession and the likelihood of corporate defaults amid a collapse in business activity quickly sent the benchmark S&P 500 and tech-heavy Nasdaq lower.
The Dow flitted between small gains and losses.
“Markets are going to stay very volatile until one of three things happens: either the number of new infections in the US peaks, there is some kind of a cure or vaccine developed or until the US economy begins to reopen,” said Randy Watts, chief investment strategist at William O’Neil+Co in New York.
Wall Street had staged a furious rally on Tuesday, with the Dow posting its best day since 1933, in wild swings that were last seen at the height of the global financial crisis.
The Senate will vote on the bill later on Wednesday and the House of Representatives is expected to follow soon after.
The total figure at stake exceeds the amount the country spends on defence, scientific research, highway construction and other discretionary programs combined.
“What’s remarkable in this particular crisis, compared to 2008 is the response by policymakers because the speed with which they’ve revamped existing programs and introduced new ones is completely unprecedented,” said Andrea Cicione, head of strategy at TS Lombard.
In early trading, the Dow Jones Industrial Average was up 147.45 points, or 0.71 per cent, at 20,852.36, the S&P 500 was down 10.96 points, or 0.45 per cent, at 2436.37 and the Nasdaq Composite was down 70.90 points, or 0.96 per cent, at 7346.96.
While the S&P 500 recovered about $US1.8 trillion in value in Tuesday’s session, it is still off about $US8 trillion from its mid-February peak.
Boeing Co led gains on the Dow, surging nearly 12 per cent, and continuing this week’s rally as sources said it planned to restart 737 MAX production by May.
Nike gained 11 per cent after beating quarterly revenue estimates and reporting rebounding sales in China.
American Airlines, Royal Caribbean Cruises and Norwegian Cruise Line Holdings, among the hardest hit by the coronavirus pandemic, jumped between 13 per cent and 23 per cent.
Advancing issues outnumbered decliners more than 1-to-1 on the NYSE and the Nasdaq.
The S&P index recorded no new 52-week high and four new lows, while the Nasdaq recorded three new highs and 31 new lows.