Dow Under Pressure as Pre-Election Jitters Weigh on U.S. Stock Market
The Dow Jones Industrial Average struggled for momentum Tuesday, as investors remained fixated on the election, corporate earnings, and Covid-19.
Equity markets are under pressure again, as a confluence of political, fiscal, and economic risks weigh on investor sentiment. | Image: Spencer Platt/Getty Images/AFP
- The Dow Jones Industrial Average hovered within a narrow range Tuesday, following a 650-point drop on Monday.
- Fading stimulus hopes and a sharp rise in Covid-19 cases are weighing on investor sentiment.
- Corporate earnings, economic data in focus.
The Dow and broader U.S. stock market traded in a narrow range on Tuesday, as investors sifted through a flurry of corporate earnings reports against a backdrop of surging virus cases.
Dow, S&P 500 Fall; Nasdaq Rises
Wall Street’s major indexes opened mixed on Tuesday, reflecting a tepid pre-market session for U.S. stock futures. The majors would eventually turn lower, with the Dow Jones Industrial Average falling 61 points or 0.2%. The broad S&P 500 Index of large-cap stocks declined by 0.1%.
The Nasdaq Composite Index was a notable exception, as the tech-driven average rose 0.3%.
Losses were mainly concentrated in the energy, industrials, and financials sectors. Shares of information technology and consumer discretionary companies rose.
Risk Sentiment Subsides Ahead of Election
Markets declined sharply at the beginning of the week, with the S&P 500 posting its biggest drop in a month on surging Covid cases and a lack of stimulus progress in Washington.
The prospect of a contested election on Nov. 3 also resurfaced after President Trump narrowed his polling gap with Joe Biden. Both candidates continue to campaign for battleground states. Watch the video below:
Attention has shifted back to economic data and corporate earnings on Tuesday, as investors continue to monitor the consequences of Covid-19 lockdowns.
In economic data, U.S. durable goods orders rose for a fifth consecutive month in September, indicating that manufacturing demand was rebounding. Orders for manufactured goods meant to last three years or more increased 1.9% in September, the Commerce Department reported Tuesday.
Orders for nondefense capital goods excluding aircraft–a key proxy for business investment–rose 1%, official data showed.
Corporate earnings are also in the spotlight on Tuesday, as software giant Microsoft reports after the close. So far, 84% of S&P 500 companies have reported better than expected third-quarter earnings, according to FactSet. Still, these companies have reported a blended earnings decline of 16.5%, the worst since 2009.