Donald Trump has beefed up the US response to the coronavirus outbreak, declaring a national emergency that will free up more federal funds to fight the disease, and striking an agreement with congressional Democrats on an economic stimulus package.

The moves by the US president on Friday cheered financial markets, with US stocks moving sharply higher to end the day up 9.3 per cent, after suffering their biggest rout since the 1987 crash on Thursday. Investors had reacted negatively to a speech by Mr Trump on Wednesday night in which he announced sweeping new travel restrictions affecting Europe, but appeared reassured by the steps he took on Friday.

In addition to declaring the national emergency, the president said in remarks from the White House that the US would also waive interest on federal student loans and purchase crude oil to boost the country’s strategic petroleum reserve.