Wall Street roared back to life on Tuesday, rebounding from the brink of bear market confirmation as bargain-hunting and hopes of government stimulus calmed investors' fears surrounding the coronavirus and growing signs of imminent recession.

Stocks whipsawed throughout another wild day on Wall Street, wiping out a gain of 3.5% to turn negative before a furious rally in the final two hours of trading delivered the biggest gain since December 2018.

All three major indexes jumped nearly 5% the day after equities markets suffered their biggest one-day losses since the 2008 financial crisis.

Still, the S&P 500 and the Nasdaq ended the session about 15% below the record closing highs reached on Feb. 19. Sinking beyond the 20% mark would confirm a bear market.

U.S. President Donald Trump said he will take "major steps" to allay market fears by asking Congress for a fiscal stimulus package to include a payroll tax cut, among other measures.

"Coming off yesterday, you've got short-term bargain-hunters coupled with potential fiscal stimulus hopes," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

"It may be the biggest benefit is not actually what's getting done - it's that there appears to be a plan," Carlson added. "There does appear to be a willingness to do something, and that's probably what's helping the market."

Market participants largely expect the U.S. Federal Reserve to cut interest rates for the second time this month at the conclusion of next week's two-day monetary policy meeting.

Outside the United States, major world economies took steps to cushion the effects of the fast spreading COVID-19.

Global markets have been rattled in recent weeks by the rapidly spreading coronavirus, which has caused widespread supply chain disruption, hobbled the travel industry and prompted drastic containment measures in Italy and elsewhere.

Market uncertainties surrounding COVID-19 were exacerbated over the weekend as Saudi Arabia and Russia scrapped their supply pact and pledged to increase crude oil production.

But oil prices rebounded from Monday's largest percentage drop since the 1991 Gulf War, with front-month Brent crude rising 10.0% after Russia indicated it was open to talks with OPEC.

Energy stocks bounced back from their worst decline on record, advancing 5.0%.

The Dow Jones Industrial Average rose 1,167.14 points, or 4.89%, to 25,018.16, the S&P 500 gained 135.67 points, or 4.94%, to 2,882.23 and the Nasdaq Composite added 393.58 points, or 4.95%, to 8,344.25.

All 11 major sectors of the S&P 500 closed higher, led by tech and rate-sensitive financial shares.

Financials jumped 6.0% after suffering their worst day in more than a decade as U.S. Treasury yields rebounded from record lows.

United Parcel Service Inc gained 6.5% as Stifel upgraded its shares to "buy," while Amazon.com Inc rose 5.1% on Cowen & Co's price target increase.

Shares of Chevron Corp and Marathon Oil Corp rose 5.3% and 21.2%, respectively, after the oil companies and their peers announced cost reduction efforts to combat plunging crude prices.

Advancing issues outnumbered declining ones on the NYSE by a 2.61-to-1 ratio; on Nasdaq, a 2.06-to-1 ratio favored advancers.

The S&P 500 posted three new 52-week highs and 100 new lows; the Nasdaq Composite recorded eight new highs and 578 new lows.

Volume on U.S. exchanges was 15.81 billion shares, compared with the 11.52 billion average over the last 20 trading days. 

GLOBAL MARKETS & COMMODITIES

Oil and global equity markets charged back after the prior day's steep losses as the world's biggest economies moved to cushion the impact of the coronavirus, but stock gains in Europe failed to hold as investors remained skittish.

The price of Brent crude climbed 10% on hopes a supply cut deal could be rescued and most benchmark government bond yields rose from record lows as governments outlined broad measures to confront the epidemic's economic and human toll.

Japan unveiled a second package of measures worth about $4 billion in spending, focusing on support to small and midsized firms.

MSCI's gauge of stocks across the globe gained 2.55% but the pan-European STOXX 600 index lost 1.14%, after initially trading higher. A jump in infections in Italy, Germany and Britain unsettled investors.

The major European bourses remained in bear territory. The FTSE 100 in London almost eked out a gain but closed down 0.1% as oil companies rebounded from the carnage on Monday as Saudi Arabia and Russia engaged in a price war.

"Traders are a bit nervy, the only positive news we've been getting out is probably rate cuts or tax cuts," said Michael Baker, an analyst at ETX Capital in London.

"We need news in terms of the actual control of the virus, which we don't seem to be having right now," he said.

Yields on benchmark U.S. 10-year Treasury debt more than doubled to 0.801% and those on German Bunds jumped around 20 basis points at one point as investors pared some safe-haven holdings, though they were beginning to ease again.

Many strategists and economists expect the Federal Reserve to cut U.S. interest rates to zero as part of a global move to provide strength and liquidity to the financial system.

The dollar rallied after huge losses against the safe-haven Japanese yen and Swiss franc, but analysts said it was too early to predict a floor.

Stocks in Asia rebounded, with Japan's Nikkei closing up 0.85% after touching its lowest level since April 2017.

China's benchmark Shanghai Composite Index traded 1.8% higher as new domestic coronavirus cases tumbled and President Xi Jinping's visit to the epicenter of the epidemic lifted sentiment.

The oil rally had the most horsepower. About half of oil's massive losses from Monday were clawed back, offering hope that markets had found a floor despite still-fragile sentiment.

Russian oil minister Alexander Novak said he did not rule out joint measures with the Organization of the Petroleum Exporting Countries to stabilize the market.

Benchmark Brent crude futures rose 8.3% to settle at $37.22 a barrel, roughly half this year's peak, reached in January. U.S. crude gained 10.4% to settle at $34.36.

Gold prices fell 1%, retreating from the previous session's jump above the key $1,700 level, as safe-haven demand waned a little amid speculation about global stimulus measures.

U.S. gold futures settled down 0.9% at $1,660.30 an ounce.

The bond market has priced in a global recession of unknown length. Investors are fully pricing an easing of at least 75 basis points at the next Fed meeting on March 18, while a cut to near zero was seen as likely by April.

Yields on 10-year U.S. Treasuries dipped to as little as 0.318% on Monday - a level unthinkable just a week ago - but climbed back to 0.6787% on Tuesday amid the stimulus chatter.