The deal also pushed the Australian dollar 1.2 per cent higher to US60.14¢, back above US60¢ for the first time in a week.
“No one has a total grasp on the economic impacts but we’ve been taking the opportunity to buy some high quality companies at valuations we haven’t seen for some time,” said Wilson Asset Management portfolio manager John Ayoub.
“[But] it’s probably too early to say this is the bottom. It just seems like a bear market rally.”
The stimulus package added to optimism provided by the US Federal Reserve’s promise of unlimited bond purchases and early signs the coronavirus was being contained – if only in the worst affected countries.
The number of new cases coming out of Italy appeared to be easing just over two weeks after Prime Minister Giuseppe Conte imposed a national quarantine. But on Tuesday, Italian Covid-19 deaths rose again, by 743, after two consecutive days of declines.
“The data coming out of Italy, it’s not everything you want to see but it’s starting to trend in the right direction,” said Mr Ayoub.
US President Donald Trump said he wanted to see the economy reopened by Easter. “We’re all working very hard to make that a reality,” he said from the White House. “My first priority is always the health and safety of the American people.”
Shares on Wall Street soared on Tuesday in a historic session where the Dow Jones Industrial Average recorded its biggest gain since 1933 and the S&P 500 Index its largest advance since the global financial crisis.
Although downgrades and guidance withdrawals have mounted this week, companies are keen to return to trading. According to Bloomberg, Apple told staff on Tuesday some of its retail stores could reopen in April on a staggered basis after closing them all earlier this month.
Market economists are certain that the Australian economy will tip into recession, and job cuts from Virgin Australia, Star Entertainment Group and womenswear retailer Mosaic Brands added to the toll from Qantas and Woodside Petroleum.
With elevated volatility, the market could reverse course just as easily.
Prime Minister Scott Morrison announced tighter social distancing restrictions late on Tuesday night and warned more could come.
“Putting the economy back online should be done in stages and society has to adapt to it,” said K2 Asset Management head of research, George Boubouras.
“There’s a solution somewhere but it has to be managed. Economies have to be brought back online but people have to get comfortable being uncomfortable. Sentiment is so fragile, hence the volatility we’ve witnessed.”