Stocks markets traded in the red yesterday. However, several tech giants rebounded on Tuesday, tempering concerns over cloudy prospects for economic stimulus. There was also a report about suspicious transactions at global banks, which further worried investors.
The S&P 500 approached the threshold that many traders consider to be a market correction. After that, it came off session lows, though. The Nasdaq 100 edged up as well. Industrial and commodity shares still pushed the benchmark gauge to its lowest in nearly two months.
JPMorgan Chase & Co. and Citigroup Inc. plummeted down by more than 2%, along with Bank of America Corp. American Airlines Group Inc. and Carnival Corp. paced their losses in travel companies due to concerns that an increase in Covid-19 cases could cause further lockdown measures.
How did the major stocks indexes fare?
The S&P 500 tumbled down by 1.2%, while the Stoxx Europe 600 Index plunged by 3.2%. The MSCI Asia Pacific Index also lost 1%.
Slim prospects for another round of fiscal stimulus waned further after the eruption of a partisan battle over replacing Supreme Court Justice Ruth Bader Ginsburg. House Democrats and Speaker Nancy Pelosi released a stopgap government funding bill. What’s more, they did this without support from Senate Republicans or the White House.
Meanwhile, Federal Reserve Chairman Jerome Powell stated that the economy is improving. However, it has a long way to go before full recovery from the coronavirus pandemic. Scott Gottlieb, the former Food and Drug Administration Commissioner, also warned the U.S. might experience at least one more cycle of the infections in the fall and winter.
A new investigation by the International Consortium of Investigative Journalists also caused more turmoil in the markets. They announced that some big global banks continued profiting from powerful and dangerous players in the past two decades, even after the United States imposed penalties.
Jeffrey Kleintop, the chief global investment strategist at Charles Schwab Corp., noted that there are worries that people will see another wave of lockdowns. U.S. political risk is also rising. According to him, some investors are concerned about more fines in place on financial-services institutions. That could further hit earnings estimates.