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Stocks fell Tuesday, as market participants considered a pared-down stimulus proposal from congressional lawmakers, and awaited the outcome of the first presidential debate later this evening. A host of more economic data reports this week also loomed, including multiple reports on the US labor market.
Earlier, stocks had briefly turned higher, after a new report showed consumer confidence jumped by the greatest margin in more than 17 years in September. The data offered at least momentary hope that that optimism would translate into sustained consumer spending to support the economic recovery.
The communication services, information technology and utilities sectors pulled the S&P 500 lower, and the Dow shed more than 200 points. The moves contrasted with the sharp rally a day earlier, following four straight weekly losses in the broader market.
“We’re a little oversold, believe it or not. Last week, we saw some real panic in the stock market. People were really liquidating everything,” Chris Vermeulen, TheTechnicalTraders.com founder and chief market strategist, told Yahoo Finance on Monday. “And I think finally people kind of put aside the pessimism from last week ... now people are kind of stepping back in hoping the market is going to find the bottom here and rally.”
House Democrats’ newly announced $2.2 trillion package offered a sliver of hope that Congress might make a last-minute move to pass further fiscal stimulus legislation before the November elections. But the package – a big step down from the more than $3 trillion Democratic lawmakers had sought earlier – leaves a chasm between their offer and the around $1 trillion Republican lawmakers have suggested would be their ceiling on a stimulus plan sum.
That has left many economists and policy pundits skeptical that a deal could be passed in the near-term – leaving a potential for markets to be disappointed on that front in the coming month. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are set to hold phone conversations today over virus relief.
Elsewhere, market participants on Tuesday will be closely watching the first of three debates ahead of the presidential election, with President Donald Trump set to face former Vice President Joe Biden in Cleveland, Ohio for a 90 minute session starting at 9 p.m. ET. Topics set to be discussed include the records of Trump and Biden, the Supreme Court, Covid-19, the economy, race and civil unrest, and election integrity, the nonpartisan Commission on Presidential Debates announced last week.
While the debate itself will not likely serve as a platform for the candidates to announce new planned policies that could impact markets, it will give market participants an opportunity to fine-tune their views on which candidate might have a better chance of winning the White House.
“Debates rarely launch new policy initiatives. The spin after the debate is what matters,” UBS economist Paul Donovan said in a note Tuesday morning. “Polarization means that committed supporters will not change their views, and the number of undecided voters is lower than four years ago—but still large enough to affect the election outcome.”
4:04 p.m. ET: Stocks come off session lows but close down, as investors consider stimulus proposal and await first presidential debate
Here were the main moves in markets as of 4:04 p.m. ET:
S&P 500 (^GSPC): -16.12 (-0.48%) to 3,335.48
Dow (^DJI): -131.33 (-0.48%) to 27,452.73
Nasdaq (^IXIC): -32.28 (-0.29%) to 11,085.25
Crude (CL=F): -$1.55 (-3.82%) to $39.05 a barrel
Gold (GC=F): +$19.70 (+1.05%) to $1,902.00 per ounce
10-year Treasury (^TNX): -1.8 bps to yield 0.6450%
3:14 p.m. ET: Stocks pare losses, Nasdaq hovers near unchanged
The three major indices cut earlier losses with an hour left in the regular trading day, and the Nasdaq briefly turned positive. The communication services, utilities and health-care sectors were the only ones in the S&P 500 to hold narrowly in the green. The energy sector sharply underperformed, falling 2.6% and giving back gains after leading Monday’s advance.
Chipmakers AMD, Micron Technology and Nvidia advanced, with Micron set to report quarterly earnings results after market close. Other tech stocks were mixed, with Amazon, Apple and Microsoft each declining in intraday trading.
1:15 p.m. ET: Stocks drop, Dow sheds 200+ points
The three major indices fell Tuesday afternoon, giving back some gains after rallying on Monday. The utilities, communication services and information technology sectors led declines in the S&P 500, while Chevron, The Travelers Companies and Dow Inc. lagged most in the Dow.
Here were the main moves in markets, as of 1:16 p.m. ET:
S&P 500 (^GSPC): -23.53 points (-0.7%) to 3,328.07
Dow (^DJI): -227.19 points (-0.78%) to 27,367.73
Nasdaq (^IXIC): -43.66 points (-0.39%) to 11,074.67
Crude (CL=F): -$1.75 (-4.31%) to $38.85 a barrel
Gold (GC=F): +$18.30 (+0.97%) to $1,900.60 per ounce
10-year Treasury (^TNX): -2 bps to yield 0.643%
10:28 a.m. ET: Stocks turn positive after consumer confidence report
The three major indices pushed into positive territory Tuesday morning after the Conference Board’s September consumer confidence index topped expectations and rose by the most in more than 17 years.
“Confidence levels are still well short of where they were at the start of the year before the pandemic struck economic activity down starting in mid-March, but the sheer magnitude of today's rise tells us the consumer thinks the worst days of the recession are over,” Chris Rupkey, MUFG Union Bank chief financial economist, said in an email. “The economy is not out of the woods yet as 20.0% said jobs were hard to get and 57.1% said employment opportunities were not so plentiful, but today's overall recovery in consumer confidence is a big step forward for the economy and is supportive of stronger growth in the fourth quarter even if Washington remains unable to provide additional fiscal stimulus.”
The utilities, health-care and materials sectors led gains in the S&P 500, while the financials, energy and real estate sectors lagged.
10:01 a.m. ET: Consumer confidence roars higher in September: Conference Board
The Conference Board’s closely watched consumer confidence index jumped far more than expected in September, as ongoing reopenings and rehiring helped bolster consumer outlooks.
The index rushed higher to 101.8 in September from an upwardly revised 86.3 in August, marking the biggest jump since mid-2003. Consensus economists had been looking for the index to come in at 90.0. Subindices tracking consumers’ assessments of present situations and outlooks for future expectations also improved in August.
Still, the headline index has yet to touch back to pre-pandemic levels, with the index having been at 132.6 in February, and around the 130 mark throughout 2019.
9:34 a.m. ET: Stocks open mixed as markets pause after rally
Here were the main moves in markets as of 9:34 a.m. ET:
S&P 500 (^GSPC): -1.33 points (-0.04%) to 3,350.27
Dow (^DJI): -44.57 points (-0.16%) to 27,539.49
Nasdaq (^IXIC): +7.00 points (+0.07%) to 11,124.12
Crude (CL=F): -$0.65 (-1.6%) to $39.95 a barrel
Gold (GC=F): +$6.80 (+0.36%) to $1,889.10 per ounce
10-year Treasury (^TNX): -1.2 bps to yield 0.651%
8:36 a.m. ET: US home price grew faster than expected in July, with housing demand climbing
The S&P CoreLogic Case-Shiller 20-city composite home price index grew by a greater than expected margin over last month and last year in July, as housing demand continues to boom.
Over last month, the home price index for 20 major US metropolitan areas rose 0.55%, jumping ahead of the 0.10% gain expected and the unchanged reading from June. The index over last year rose 3.95%, versus the 3.6% consensus.
8:31 a.m. ET: Trade deficit yawns to a record as imports surge
The US trade deficit grew by $2.8 billion to a record $82.9 billion in August, the Commerce Department said Tuesday, as imports rebounded from the pandemic more quickly than exports, driving a yawning goods trade gap in the US. Consensus economists were looking for the deficit to total $81.8 billion in August.
Imports jumped 3.1% to $201.3 billion in August, hitting a seven-month high. Exports, meanwhile, increased 2.8% to $118.3 billion. Taken together, goods brought into and exported out of the US totaled $319.6 billion, improving by more than $9 billion from July but holding below pre-pandemic levels as international trade gradually picks back up amid the ongoing virus outbreak.
“The Covid shock crushed both exports and imports, and both remain below their prior levels, but the rebound in imports has been bigger,” Pantheon Macroeconomics economist Ian Shepherdson said in an email. “Net trade is likely to be a net drag on Q3 GDP growth, probably subtracting more than one percentage point. That will be trivial compared to the surge in domestic spending, which likely will lift growth to 30% or more, thanks to hugely favorable base effects and strong momentum in the early part of the quarter.”
7:29 a.m. ET Tuesday: Stock futures point to a mixed open
Here were the main moves in markets as of 7:29 a.m. ET:
S&P 500 futures (ES=F): 3,348.25, up 2.25 points or 0.07%
Dow futures (YM=F): 27,500.00, up 18 points or 0.07%
Nasdaq futures (NQ=F): 11,386.00, down 8.75 points or 0.08%
Crude (CL=F): -$0.27 (-0.64%) to $40.33 a barrel
Gold (GC=F): +$11.40 (+0.61%) to $1,893.70 per ounce
10-year Treasury (^TNX): -0.7 bps to yield 0.654%
6:11 p.m. ET Monday: Stock futures open higher
Here were the main moves in equity markets, as of 6:11 p.m. ET Monday:
S&P 500 futures (ES=F): 3,349.25, up 3.25 points or 0.1%
Dow futures (YM=F): 27,517.00, up 35 points or 0.13%
Nasdaq futures (NQ=F): 11,394.5, flat