U.S. index futures indicated a positive start for the week, with contracts rebounding after the Bank of Japan issued an emergency statement to support market stability.. Shares in Europe climbed, oil jumped while the U.S. dollar traded lower.

Following a decline of more than 2% earlier, contracts on the S&P 500 quickly erased the plunge and rallied as much as 2.2%, with investors drawing optimism from the BOJ comment that it will provide “ample liquidity” through market operations and asset purchases. The move came after the Federal Reserve issued an unscheduled statement on Friday, opening the door for a rate cut this month.

Significant bad news was been priced into equities during a seven-day retreat that included the worst week since the Financial Crisis, as investors assess impact from the coronavirus on travel and supply chains. The news got worse since markets were last open, though calls for a Fed rate-cut intensified, with President Donald Trump saying the central bank should act.

“The unknown hit to growth aside, Fed Chair Powell signaled the FOMC’s willingness to ease policy in response to the outbreak, which is consistent with the Fed’s primary goal of easing financial conditions to extend the cycle,” Dennis Debusschere, head of portfolio strategy at Evercore ISI, wrote in a note. “They will use every tool possible to achieve that goal.”

The volatility highlighted the fragility of investor confidence as the virus outbreak worsens. Expectations for Fed intervention boosted spirits into the close on Friday, when investors poured into stocks to cut a drop that reached 4% to just 0.8% after Chairman Jerome Powell opened the door to a reduction by issuing a rare statement pledging to “act as appropriate” to support the economy.

“News from the Fed on Friday is being seen as one of the catalysts for the move,” said Nick Twidale, general manager of IC Markets in Sydney. “It’s going to be a battle between any further bad news on the coronavirus spread and central bank reaction this week for traders and investors, and this will probably lead to increased volatility as uncertainty continues to reign.”

The Stoxx Europe 600 Index advanced 2% as of 8:39 a.m. in London, with energy and food and beverage shares rising the most among sectors. Indexes in Tokyo, Hong Kong, Shanghai and Seoul also climbed.

Calls for an emergency cut mounted over the weekend, and President Donald Trump said the Fed should lower rates. Bank of America now expects the central bank to shave 50 basis points at its March meeting. Bank of Japan quickly showed what kind of action it would take by offering to buy 500 billion yen ($4.6 billion) of government bonds with a repurchase agreement to provide liquidity to market participants.

Doubt persisted that rate cuts will actually be able to stimulate activity amid a health emergency that threatens to reduce both supply and demand in the economy. China’s manufacturing sector saw activity contract sharply in February, with the official gauge hitting the lowest level on record, highlighting the devastating impact of the coronavirus on the economy.

“The China PMIs were expected to be really bad, but they were off the charts bad,” said Nathan Thooft, Manulife Asset Management’s head of global asset allocation. “Unfortunately the news on a U.S. death seemed inevitable. Human tragedy, but expected. From an investment and consumer sentiment perspective, it’s another level of worry that will be on people’s minds.”

Goldman Sachs economists now expect the virus to inflict a “short-lived global contraction” on the world economy that forces the Fed to slash rates in the first half.

Trump said Saturday that investors should take solace from the strength of the American consumer, even as his virus task force warned the number of cases would likely rise.

“The markets will all come back,” Trump said. “The markets are very strong, the consumer is unbelievably strong, the companies are very strong. It’s certainly not a good situation, when you lose travel that’s a big part of market.”

While the virus broke out in China in late January, the threat to American markets didn’t register until Feb. 19 -- three days after Apple Inc. warned that its sales would be hampered by the outbreak. The S&P 500 closed at a record that day. Since then, the number of companies cutting revenue and profit targets has surged. Stocks have plunged 13%, leaving the bull market’s vitality in jeopardy.

“The problem is people faded this right out of the gate, and now it’s not going away overnight,” Dan McMurtrie, founder and portfolio manager at Tyro Partners, said by phone. “People trying to buy the dip are getting run over.”