US President Donald Trump and the Senate have agreed a massive economic relief package worth more than $1.8 trillion (£1.5tn).
The package includes money to bail out industries that have been affected by the coronavirus crisis.
Republican Senate Majority leader Mitch McConnell described it as a “wartime level of investment” in the economy.
US markets, which surged on Tuesday in anticipation of the deal, held steady in opening trade.
Earlier, shares rose in Europe and Asia. Japan’s benchmark Nikkei 225 index closed 8% higher on Wednesday following news of the relief deal.
Markets in Europe were also trading higher, with London’s FTSE 100 index up more than 1%.
Full details of the deal agreed in the US will not be published until later on Wednesday. However, it is expected to contain measures to help people pay bills if they are laid off because of the virus, expand unemployment assistance by $250bn and get $350bn in emergency loans to small firms.
Mr McConnell said it would also “stabilise” key industrial sectors and give money to hospitals and other healthcare providers which were having difficulty getting equipment.
“We’re going to pass this legislation later today,” Mr McConnell added.
Senate Democratic Leader Chuck Schumer called the package “the largest rescue package in American history”. He said it was a “Marshall Plan” for hospitals. “Help is on the way, big help and quick help.”
Separately, President Trump on Tuesday said he wanted to get the economy up and running again by Easter.
On Wall Street, the Dow Jones jumped by 11.4% on Tuesday – its biggest one-day gain since the Great Depression – as political leaders signalled a deal was close.
The final package is estimated to amount to about 10% of US output, more than double the relief offered during the 2008 financial crisis. William Foster, a vice president at Moody’s Investors Service, said it would “help mitigate the depth and duration of the economic shock”.
“Nonetheless, we expect the virus to have a significant negative impact on growth and the fiscal deficit this year,” he said.
Governments around the world have responded by locking down societies in the hope of slowing the spread of the virus.
America is more than midway through a 15-day attempt to slow the spread of the virus through social distancing.
A recent Goldman Sachs report estimated that the nation’s gross domestic product in the second quarter could shrink by 24%, dwarfing the previous 10% record decline in 1958. Other reports predict worse.
The International Monetary Fund has warned the hit to global growth is likely to be bigger than the financial crisis.
Many countries are now working on stimulus packages to support their economies, but these plans have received mixed responses from investors, as markets experience unprecedented volatility as they grapple with the economic impact of the coronavirus pandemic.
This month alone has seen the Dow having the five biggest daily gains and five biggest falls of its 135-year history.
Reacting to news of the stimulus package, Tom Stevenson, investment director at fund manager Fidelity International, said: “It’s good news, but we’re not out of the woods yet.
“When markets are falling, you get these big rallies but you shouldn’t get stuck on that. They do bounce around in these situations.”
The US rescue package follows five days of intense negotiations to try to agree a deal that will provide aid for American workers and businesses.
Before it becomes law the deal must get through the Republican-controlled Senate, the Democrat-controlled House of Representatives and be signed by President Trump.
The US central bank, the Federal Reserve has already announced $4tn in extra lending to help stimulate the economy in the face of the coronavirus.
Nearly 19,000 people have died with coronavirus worldwide since it emerged in China’s Wuhan province in January, and more than 420,000 infections have been confirmed.
Southern Europe is now at the centre of the pandemic, with Italy and Spain recording hundreds of new deaths every day. The US has confirmed more than 55,000 cases, the third highest of any country after China and Italy.
US Congress has approved a $2tn rescue bill – the biggest package of support for the economy in modern American history.
Like the UK’s emergency economic measures, it offers $350bn in loans for small businesses to cover expenses for up to 10 weeks; it also offers $500bn in aid to airlines and other corporations. The government is also sending out cheques of $1,200 for every adult and $500 per child.
But there’s concern that the package, for all its huge size, simply isn’t big enough to soften the scale of the economic shock caused by the Covid-19 shutdown, now a global phenomenon. Some economists say US firms may need five times as much cash to prevent mass bankruptcy and unemployment.