The Dow and broader U.S. stock market traded higher on Wednesday, as investors held onto hopes that Congress could still pass a coronavirus relief bill before the election.
Wall Street’s major indexes diverged after Wednesday’s open, reflecting a tepid pre-market for U.S. stock futures . The Dow Jones Industrial Average declined by as much as 62 points before reversing losses.
The broad S&P 500 Index of large-cap stocks rose 0.3%, with gains in the communication services sector offsetting sharp declines in energy .
Meanwhile, the technology-focused Nasdaq Composite Index rose 0.5%.
A measure of implied volatility known as the CBOE VIX broke above 30 on Wednesday, pointing to turbulent trading conditions over the next 30 days. The so-called “fear index” has a long-running average of around 20. Anything above that level points to higher than usual volatility over the next 30 days.
Democrats and Republicans have forged ahead with stimulus dialogue, setting aside a self-imposed Tuesday deadline put forward by House Speaker Nancy Pelosi. According to The Wall Street Journal , lawmakers are making progress on a new stimulus deal despite Senate Republicans’ opposition. Watch the video below for more:
Although neither side provided details about whether a stimulus deal is within reach, White House chief of staff Mark Meadows says Pelosi is trying to finalize an agreement by the weekend.
Convincing Republicans to agree to a multi-trillion-dollar relief package could be a major hurdle for the White House. Senate Majority Leader Mitch McConnell is already planning to vote against a $2 trillion aid package, arguing instead that Congress should pass a skinny bill that puts cash directly into the hands of Americans.
The federal government rate a deficit of $3.1 trillion in fiscal year 2020 , which is equivalent to 15.2% of GDP. Despite the harmful effects of large and sustained budget deficits, lawmakers and the Federal Reserve are adamant that new stimulus is needed to keep the economy afloat.