US close: Wall Street cuts Monday's losses in half with strong rally

US stocks closed sharply higher on Tuesday following the Dow Jones and S&P 500's worst daily showings since the Global Financial Crisis in the previous session.

At the close, the Dow Jones Industrial Average was up 4.89% at 25,018.16, while the S&P 500 was 4.94% firmer at 2,882.23 and the Nasdaq Composite saw out the session 4.95% stronger at 8,344.25.

The Dow closed 1,167.14 higher on Tuesday, cutting in half losses seen in the previous session after coronavirus fears continued to roil shares, which combined with an unexpected record cut in prices from oil producer Saudi Arabia to make for a particularly dark day on Wall Street.

Donald Trump suggested on Monday that some sort of "payroll tax cut or relief" was being considered to offset the negative impact of the outbreak.

While sentiment took a turn early in the session after White House officials told CNBC that the President wasn't even close to rolling out any specific proposals aimed at dealing with a coronavirus-fuelled economic slowdown, markets got a boost after it was later reported that the President had pitched a 0% payroll tax rate for the rest of 2020.

Oil prices suffered in the previous session, with West Texas Intermediate prices diving more than 24% in their worst day since 1991 after Saudi Arabia cut crude prices for April following a collapse in OPEC+ talks.

Prices rallied on Tuesday, with West Texas Intermediate crude up 12.01% at $34.87 per barrel and Brent crude ahead 10.39% at $37.93 a barrel.

The yield on the benchmark 10-year Treasury note, which dropped below 0.5% for the first time ever on Monday, also slightly recovered and was hovering around 0.80% at the close.

In corporate news, American Airlines said it would be drastically slashing both domestic and international flights in the wake of the outbreak.

No major earnings or data points released on Tuesday.