Equity markets are mixed to higher on Tuesday after pulling back earlier in the session, as an increasing tally of coronavirus cases continue to affect investors’ moods.
Nevertheless, the key stock index benchmarks are attempting to finish the quarter substantially higher, with the Dow Jones Industrial Average and S&P headed to notch their biggest quarterly gains since 1998, while the Nasdaq is targeting its best quarter since 2001, and stock ETFs are following their benchmarks.
The Dow Jones Industrial Average is off slightly, down 0.17%, while the S&P 500 gained 0.63% and the Nasdaq Composite climbed 1.13%.
“A combination of 1) Stimulus, 2) Positive trends in the virus, 3) Economic reopenings and 4) Hopes for a vaccine drove stocks higher in Q2,” wrote Tom Essaye, founder of The Sevens Report. “As we begin Q3, only one of those tailwinds is currently in place: Stimulus. That doesn’t mean we’ll see a correction, but be suspect of market rallies until we can add more forces supporting stocks because we’re one stimulus disappointment away from an ugly day.”
Tuesday is the last day of the month, and the major indexes are attempting their third consecutive monthly gain. The Dow climbed 0.7% for June. The S&P 500 and Nasdaq gained 0.9% and 5.2%, respectively, month to date.
Federal Reserve chair Jerome Powell and Treasury Secretary Steven Mnuchin testified before the House Financial Services Committee, discussing the Fed and Treasury’s answer to the coronavirus pandemic.
Powell continues to impress the state of uncertainty that Americans face due to the ongoing and burgeoning coronavirus pandemic and the disregard for safety measures.
“Output and employment remain far below their pre-pandemic levels. The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus,” Powell said. “A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities. “The path forward will also depend on the policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed,” Powell added.
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