The stock market rebounded Monday afternoon to erase its sharp slide at the opening bell, with investors upbeat after the Federal Reserve announced it would buy individual corporate bonds.

The rally came after investors expressed initial concern that the novel coronavirus pandemic could be picking up in numerous states.

The Dow Jones industrial average started with a loss around 500 points, or 2 percent, shortly after it opened at 9:30 a.m. But it recovered those losses by shortly after noon and, following the Fed’s announcement, closed up 158 points, or 0.6 percent. The Nasdaq closed up 1.4 percent.

The rally was sparked by the Fed’s afternoon announcement, in which it said it would “begin buying a broad and diversified portfolio of corporate bonds to support market liquidity and the availability of credit for large employers.”

Previously, the U.S. central bank had only been purchasing corporate bonds that were part of exchange-traded funds.

Corporate bonds are corporate debt, and the Fed’s decision to pump money into this area is another way for it to help give companies more access to cash. But it could also open the Fed up to criticism that it is playing a role in picking winners and losers in the economy based on which firms it selects and which firms it opts against selecting.

The tech-heavy Nasdaq composite index and the Standard & Poor’s 500-stock index also jumped on the news after slipping into negative territory this morning. By 4 p.m., the Nasdaq was up 137 points, or 1.43 percent, and the S&P 500 leveled off around 25 points, or 0.83 percent.

Shortly after the market opened, the sell-off initially hit travel-company stocks hard, but by the afternoon, the stocks had come back.

American Airlines Group Inc. initially dropped nearly 5 percent but jumped back to less than one percentage point in the red by the time the market closed. Norwegian Cruise Line Holdings slid around 8 percent before ending about minus 2.5 percent by 4 p.m., and United Airlines Holdings dropped around 7.2 percent before recovering and closing down 1.6 percent.

These companies’ shares have been particularly volatile during the coronavirus pandemic because many people have been reticent to make travel plans when conditions remain uncertain.

The downturn continued last week’s slide, which was the sharpest plummet since mid-March, prompted by the health and economic crises, despite a hopeful Friday rebound.

As of Monday, at least 114,000 people had died in the United States of covid-19, the disease caused by the coronavirus, since February. At least 2,087,000 cases have been reported. Public health officials fear new surges after large Memorial Day crowds and protests in cities across the country and state reopenings.

“Wall Street’s bumpy road continues as investors continue to grapple with concerns that China is showing signs that a second wave of the pandemic is here and as a spike in new cases in the US could suggest many states could rollback their reopenings,” Edward Moya, an analyst with OANDA, wrote in an email to The Washington Post on Monday. “The stock market rebound will now go through a ton of scrutiny because the US economy was supposed to have a short stint in the ICU and be well into the rehab process by now.”

The Federal Reserve has predicted a slow recovery for the economy, with unemployment at 9.3 percent by the end of 2020. It has taken a number of extraordinary steps to help companies navigate the crisis, lowering interest rates and attempting to flood financial markets with cash.

“The problem for the economy is that the labor market will not bounce back as quickly as financial markets have initially provided,” Moya said. “The Fed is doing their part, but partisan politics have delayed the next fiscal response till after July 22nd, and that will erode at confidence.”