The Dow Jones ripped higher on Wednesday as investors aggressively bought the recent dip in mega-cap tech stocks.
Risk-on conditions returned with a big bang on Wednesday, as the Dow Jones surged after Tuesday’s decline. With the bruised tech sector leading the rally, jobs data and declining coronavirus cases are helping to support Dow bulls as they aggressively buy the dip.
All three major U.S. stock indices enjoyed a healthy bounce mid-week with the Nasdaq (+3%) leading the way, while the S&P 500 and Dow Jones grew around 2%.
On the data front, JOLTS job openings provided some good news in a shaky U.S. jobs market, as momentum continues to be seen in the economic recovery.
Helping to fuel this comeback is a steady decline in the number of domestic coronavirus cases. This is a stark contrast with the Eurozone, where there is a dramatic second-wave underway.
Providing a visible kick to risk-appetite, New York Governor Cuomo announced that indoor dining would be permitted at 25% capacity on September 30.
It was not all good news as the first high-profile vaccine disappointment was seen yesterday, with front-runner AstraZeneca postponing phase 3 trials. If Wall Street was concerned about this, it didn’t show, as even AZN stock only fell 1% today. Watch the video below.
Joshua Mahony, Senior Market Analyst at IG, provided a comment to CCN.com on the vaccine setback, acknowledging that there are concerns that President Trump may have been relying on AstraZeneca’s product for his November 1 timeline:
Hopes of a swift vaccine have been dealt a blow after AstraZeneca stopped trials globally in response to a negative reaction in a UK-based recipient. From a market perspective, this does damage the timeline associated with one of the most hopeful products pushing towards the finish line… With Trump having told states to prepare for a vaccine by 1 November, it is unclear whether the product in question was going to be produced by AstraZeneca.
On the political front, investors have had little polling meat to get their teeth into, as pollsters see little movement in Trump or Biden’s election chances. The most up to date predictions see almost no bump for the White House after the most recent RNC convention, and Biden holding a commanding lead in swing state Pennsylvania.
The Dow 30 posted an incredible turnaround on Wednesday, as Apple and Microsoft flipped the script with a big rally. Both tech giants exploded with 5% gains, leading the risk-on rally. Newly minted Dow Jones member Salesforce.com also enjoyed a 4% gain. Watch the video below.
Oil supermajor Chevron enjoyed a 2% rally as crude oil mounted a 3% gain, halting its recent slide after Saudi Arabia cut its prices.
Across the entire index, it was only Walgreens that couldn’t manage a green figure, as WBA tumbled 1%
Last modified: September 23, 2020 2:29 PM