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While the broader markets ended the Wednesday trading in positive, uncertainty still hovers around Wall Street as stimulus talks have been pushed further on Thursday. Analysts expect the market to remain volatile until the U.S. Presidential Elections on November 3.
On Wednesday, September 30, the Dow Jones Industrial Average (INDEXDJX: .DJI) ended trading 300 points higher. On the last day of Q3 2020, Dow closed at 27,781.70 levels jumping 329 points or 1.2%. Other indices like S&P 500 (INDEXSP: .INX) and Nasdaq Composite (INDEXNASDAQ: .IXIC) also ended in the green.
It was an absolute volatile trading session on Wednesday as Wall Street waited on hopes of more stimulus announcements. While the indices jumped even higher during the day trading, the stock ended up cutting gains in the last hour. This is because the U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi failed to arrive at a mutual consensus on stimulus arrangements.
The House Democrats delayed the vote on the proposed $2.2 trillion stimulus package until Thursday. Pelosi said that she had an “extensive conversation” with Mnuchin and “found areas where we are seeking further clarification”. However, both parties have reportedly reached common grounds on matters of small business loans, direct payments, and airline aids.
In the early hours, Wall Street showed optimism on reports that lawmakers were giving a “serious try” for the bill. Banking stocks made good gains on Wednesday. Citigroup Inc (NYSE: C) jumped over 1.6% while Goldman Sachs Group Inc (NYSE: GS) gained more than 2% by the closing. airline industry stocks like Boeing Co (NYSE: BA) also jumped 1% amid the hope of government support.
Dow Volatility to Continue after the Q3 End Up to the U.S. Presidential Elections
Analysts say that markets will continue to remain choppy over the next month up to the U.S. Presidential Elections. September was the first month since March that Dow Jones gave a negative monthly closure. On Wednesday, Dow Jones ended nearly 1300 points lower from its monthly high on September 2.
Analysts are expecting the short-term volatility to continue until the election date November 3 with market uncertainty going higher. Speaking to CNBC, g, managing director at KKM Financial said:
“It was a long night and there’s a lot that needs to be sorted out. It became pretty apparent that this thing is not going to be over on Nov. 3 and I think the market is probably not too crazy about that. The short-term volatility pressures probably won’t abate anytime soon after this debate. In a sense, it’s creating even more uncertainty.”
The economic recovery in the housing sector seems to be on a good footing with pending home sales jumping 8.8% in August. The data provided by ADP’s monthly private-sector jobs also showed a growth of 749,000 in September. This is 25% higher than the expected 600,000 by the Dow Jones survey.
Banking giant JPMorgan Chase & Co (NYSE: JPM) is hopeful for the market in the long-term, at least the next 12 months. JPMorgan strategist Grace Peters expects the S&P 500 to surge another 10% by September 2021.