Stocks and index ETFs continued to slump on Tuesday, with only tech stocks struggling to remain in the green, as the number of coronavirus cases surges yet again, and the battle for control of the country becomes increasingly contentious ahead of next week’s U.S. presidential election.
Two out of three of the key benchmark stock indexes are dropping yet again on Tuesday, as of 1PM EST, in what appears to be a brutal end to October. The 30-stock Dow slipped another 149 points, or 0.55%, while the S&P 500 fell 0.12%. Only the Nasdaq Composite rallied, climbing 0.6%, buoyed by tech stocks like Facebook, Amazon, Microsoft and Apple, which all added over 1%, amid an otherwise sea of red.
The major stock index ETFs are also struggling on Tuesday along with their underlying benchmarks, with the SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) are all lower into the early afternoon session. The iShares Core S&P 500 ETF (IVV) is slightly lower Tuesday as well.
Losing stocks included Airlines like Delta and American Airlines, which were both down over 2%, and United, which slipped 1.6%, amid coronavirus woes. The U.S. Global Jets ETF (JETS) tumbled 2.59% amid the airline declines.
Coronavirus and Stimulus Latest
Data from Johns Hopkins University revealed that daily U.S. coronavirus cases have exploded by an average of 69,967 over the past week, which is a new record. Average coronavirus hospitalizations have also gained momentum, rising by at least 5% in 36 states over the past week, according to the Covid Tracking Project.
The coronavirus developments, along with a continuing stalemate over stimulus, led stocks to tumble on Monday, with the Dow marking its largest single-day drop since early September; the benchmark snatched back most of its October gains.
Prospects of a stimulus deal now appear dim, as Democrats seem clearly scorned by the Senate's confirmation of Supreme Court Justice Amy Coney Barrett on Monday.
In his floor speech Monday, Schumer echoed Mitch McConnell's words in 2013, after the Democratic-controlled chamber eliminated the 60-vote rule on lower court and executive branch nominations, saying, “My colleagues will regret this for a lot longer than they think.”
“Today … will go down as one of the darkest days in the 231-year history of the United States Senate,” the New York Democrat said. “Let the record show that tonight the Republican Senate majority decided to thwart the will of the people and confirm a lifetime appointment to the Supreme Court in the middle of a presidential election after more than 60 million Americans have voted.”
Still, House Speaker Nancy Pelosi’s spokesperson tweeted that the Democratic leader remains “optimistic” about a pre-election deal after Monday’s phone call with Treasury Secretary Steven Mnuchin.
Investors are also anticipating a potentially contested election result, which could lead to extremely volatile activity for stocks and index ETFs.
“The biggest risk appears to be the threat of a contested election and the country not knowing the winner of the Presidential election next Tuesday night,” Brian Price, head of investment management for Commonwealth Financial Network, told CNBC.” I think that investors are taking some chips off the table or increasing their hedging positions in advance of what could be a tenuous period for risk assets.”
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