Wall Street moved into a broad rally on Wednesday as investors rebounded from the shock of President Donald Trump’s announcement that he intended to halt stimulus talks until after the election, and were encouraged that incremental aid could be around the corner. view.
All three major U.S. stock indexes rose sharply in the wake of the late-session selloff on Tuesday triggered by Trump’s tweet.
Trump relented a bit on Wednesday, saying he supported a more fragmented approach to providing pandemic aid, while White House Chief of Staff Mark Meadows said he was “not optimistic for a comprehensive deal.”
“The market is trying to read the tea leaves and today it says that even if it’s gradual progress, something is better than nothing,” said Matthew Keator, managing partner at Keator Group, a wealth management firm at Lenox, Massachusetts.
“The recent action in the market is based on the success or failure of the stimulus package and the extent to which something will be done before the election,” Keator added. “It is the topic of the day.”
The US Federal Reserve is expected to release the minutes of its last monetary policy meeting later on Wednesday.
On Tuesday, before Trump halted the stimulus negotiations, Fed Chairman Jerome Powell warned that the economic recovery would slide into a downward spiral if Congress does not provide additional fiscal assistance.
The Dow Jones Industrial Average rose 423.14 points, or 1.52%, to 28,195.9, the S&P 500 gained 44.47 points, or 1.32%, to 3,405.42 and the Nasdaq Composite added 148.68 points , or 1.33%, to 11,303.28.
European stocks fell slightly as optimistic gains were offset by uncertainties surrounding the fate of a US stimulus package.
The pan-European STOXX 600 index lost 0.14% and MSCI’s global stock indicator gained 0.82%.
Emerging market stocks were up 0.56%. MSCI’s broader Asia-Pacific equity index outside of Japan closed 0.89% higher, while Japan’s Nikkei lost 0.05%.
The prices of US Treasuries fell and the yield curve steepened as markets took comfort that at least some stimulus measures were still on the table.
Benchmark 10-year notes last fell 10/32 in price to yield 0.7718%, from 0.74% late Tuesday.
The 30-year bond last fell 26/32 in price to yield 1.5716%, from 1.537% late Tuesday.
The stagnation of the pandemic aid package, along with a larger-than-expected rise in US inventories, pushed crude prices down.
US crude fell 2.88% to $ 39.50 a barrel and Brent last stood at $ 41.43, down 2.86% on the day.
The dollar was essentially flat against a basket of world currencies as markets reacted to Trump’s willingness to back some stimulus measures.
The dollar index was flat, with the euro rising 0.27% to $ 1.1766.
The Japanese yen weakened 0.32% against the dollar at 105.99 per dollar, while the British pound last traded at $ 1.2907, an increase of 0.23% on the day.
Gold prices rose as uncertainties about coronavirus aid diminished.
Spot gold added 0.5% to $ 1,886.83 an ounce.
This story was published from a news agency feed with no changes to the text. Only the title has been changed.
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