U.S. Stock ETFs Try to Find a Stable Footing | ETF Trends

U.S. markets and stock ETFs struggled higher on Tuesday as concerns over the next stimulus package and the pace of the economic recovery dampened sentiment.

On Tuesday, the Invesco QQQ Trust (NASDAQ: QQQ) increased 0.9%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was flat, and iShares Core S&P 500 ETF (NYSEArca: IVV) rose 0.4%.

“The market is looking for some stability. Once again investors and traders are going to look to names that had gotten unduly beaten up,” Kenny Polcari, managing partner at Kace Capital Advisors, told Reuters.

The equity market started the week off on the wrong foot on fears over a new round of lockdowns in Europe and a deadlock in Congress over the size and scope of an additional coronavirus-relief package weighed on hopes of a quick economic rebound.

“We went too far, too fast,” Lindsey Bell, the chief investment strategist at Ally Invest, told the Wall Street Journal. “I don’t think any of this should be a surprise.”

Investors are now looking at an extended period of market volatility due to the heightened political uncertainty in Washington following the death of Supreme Court Justice Ruth Bader Ginsburg.

“All the political energies are going to be directed towards the next Supreme Court nomination. I don’t see them paying attention to that and pushing stimulus through at the same time,” Mike Zigmont, head of trading and research at Harvest Volatility Management, told Reuters.

Meanwhile, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin testified on Capitol Hill about the government’s response to the Covid-19 pandemic. Powell argued that Congress needs to spend more to support the struggling parts of the economy.

“The path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government,” Powell said.

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