The Dow Jones Industrial Average has posted second day of gains, rising 2.4% after witnessing its best one-day percentage gain since the Great Depression on Tuesday.
"Turnaround Tuesday" saw the bourse surging 11.4% or 2112.98 points during trading, on hopes of a $3.4 trillion COVID-19 stimulus package.
Other major US indexes posted mixed gains and losses overnight, with the S&P 500 rising a further 1.2% and the Nasdaq Composite falling 0.5%.
In the past two days, the Dow has lifted 14%, its largest two-day rally since 1987.
The surge comes as law makers signal the US Senate is close to passing a US$2 trillion stimulus bill, which will provide financial assistance to unemployed Americans and distressed industries impacted by the coronavirus.
The stimulus package reportedly includes US$500 billion to fund industries impacted by COVID-19, US$350 billion in small business loans, US$250 billion in aid for those out of work, US$75 billion for hospitals and payments of up to US$3000 for families.
It comes as the number of cases in the US soars to 66,132, with over 940 people dying from the virus. In New York alone, 30,000 people have tested positive for the coronavirus.
Anticipation of the stimulus bill, as well as positive sentiment around the Federal Reserve's new quantitative easing measures and slashed interest rates, has helped fuel US markets' two day rally.
However, according to Janus Henderson multi-asset portfolio manager Oliver Blackbourn, a return to a bull market at this stage is unlikely.
"Given this was likely the last major policy innovation from stretched policy makers, the question is what comes now?" He questioned.
"Will this be enough to send markets higher or will the focus return to the viral data and the uncertainty of the eventual economic impact? Incremental policy news is unlikely to have the same effect going forward."
Although exact details of the support package are still unknown, it should alleviate fears of further economic pain for individuals and companies, Blackbourn said.
"However, equities tend to act more on hope for the future than credit markets, which focus on the need to survive the intervening period," he said.
"Credit markets also moved higher yesterday, although it was noticeable that US dollar high yield debt is still close to its lows given that these companies are more likely to fall through the cracks in both Fed and government policies."
Perpetual also doesn't believe we have hit rock bottom yet.
"The rally was unconvincing with the US market in particular closing well off its peak and with little momentum," it said.
"As the environment is governed by massive uncertainty, large price declines and very high economic risk, elevated two-way volatility should be expected."
For investors to be sure that the market has hit its bottom, they should look to a stabilisation in the growth rate of COVID-19 cases in the world's three largest economies (China, Europe and the US), Perpetual said.
They should also look out for declining credit spreads, for the financial sector to undertake intermediation again, and a restoration in private sector balance sheets, it said.
"This combination will provide a steadfast foundation to bring unemployment down and create positive reinforcing feedback loops in terms of activity, profits, labour market gains and investments," Perpetual said.
"Risk markets will not have to see all four to begin their recovery, but investors need to remain cautious as major downside risks in markets are still prevalent and may spark when the economic damage from the sector closures reveals itself."
Read our full COVID-19 news coverage and analysis here.