U.S. equities and stock exchange traded funds were unchanged Thursday as former FBI Director James Comey testified before Congress and investors keep an eye on the United Kingdom general election.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were flat Thursday.
U.S. markets were stuck in range bound trading after Comey’s testimony was seen by investors as having no real smoking gun that could implicate president Donald Trump, reports Tanya Agrawal for Reuters.
Comey revealed he was vexed by Trump’s attempts to get him to drop a probe into former national security advisor, Michael Flynn, but did not state whether he thought the president obstructed justice. Many market observers were concerned that any major revelations would impeded Trump’s pro-growth agenda, like lowering taxes or tax deregulation, which have helped support the recent equity market rally.
“I think the market is taking less of an alarmist review of this situation because there is no smoking gun here. So it’s not particularly impactful for thinking about … Trump’s economic agenda to go through,” Thomas Simons, money market economist at Jefferies & Co, told Reuters.
Further lessening the uncertainty, the European Central Bank signaled no further interest rate cuts earlier on Thursday as the Eurozone outlook improves, but the central bank did warn that depressed inflation meant it would continue to add more stimulus into the economy.
However, investors were still patiently waiting on the U.K. general election results, with opinion polls showing Theresa May’s Conservative Party leading between 5 and 12 percentage points over the main opposition Labour Party, which may indicate she could increase her majority.
“The market cares because if Theresa May loses the majority that would be disruptive of the Brexit process,” Art Hogan, chief market strategist at Wunderlich Securities, told Reuters. “Getting back into something that seemed to be a fair and orderly process into something that’s going to be more disruptive would not be a market positive.”
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