U.S. markets and stock exchange traded funds jumped Tuesday as U.S. lawmakers try to push through negotiations on a new coronavirus stimulus package to support American households and businesses before a deadline in Congress.
On Tuesday, the Invesco QQQ Trust (NASDAQ: QQQ) increased 1.3%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was up 1.3% and iShares Core S&P 500 ETF (NYSEArca: IVV) rose 1.4%.
House of Representatives Speaker Nancy Pelosi revealed optimism that Democrats could reach a deal with the White House and roll out an aid package by early next month, Reuters reports.
“Visibly there is optimism that the stimulus deal is going to be done at the end of the day,” Matthew Stucky, portfolio manager, equities at Northwestern Mutual Wealth Management Co., told Reuters.
Pelosi indicated that the White House needs to come together with Democrats by the end of Tuesday if they expect to pass the next coronavirus relief bill before the presidential election. The Speaker of the House and Treasury Secretary Steven Mnuchin helped bridge policy differences that held up the relief package, but while differences remained, both sides said they are working it out.
“There has to be some form of a deal: the most likely outcome is that they’ll have to do something. Given what’s happening with Covid, the economy needs some support and markets need some form of guidance,” Peter Dixon, an economist at Commerzbank, told the Wall Street Journal. But “we are really running out of time.”
Uncertainty over the delayed coronavirus aid package has fueled volatility in the equities market that previously thought it was a locked in deal, and analysts anticipate further market turbulence with only two more weeks until Election Day.
The third-quarter earnings season has been pushing forward, with 66 S&P 500 companies reporting results and 86.4% beating expectations for earnings, according to Refinitiv IBES data.
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