US Stocks Go Up Following Trump’s Discharge and Promise of Stimulus Package
U.S. stocks have gone up on Monday, following the confirmation that President Donald Trump is well enough to be returning to the White House and continue his recovery from a COVID-19 infection there.
Trump was transferred to the Walter Reed National Military Medical Center last Friday after announcing that he and first lady Melania Trump had tested positive for COVID-19.
Following Trump's announcement, U.S. stocks slumped but slightly recovered when House Speaker Nancy Pelosi announced that federal aid for airlines will be imminent so 40,000 airline workers would not need to be furloughed.
The rise in the U.S. stocks was also attributed to the promise of a second stimulus package legislature being passed soon as Pelosi and Treasury Secretary Steven Mnuchin continue their negotiations with less than a month before the November 3 presidential election.
The Dow Jones industrial average shot up 1.7 percent equivalent to 465.83 points to close at 28,148,64.
The S&P 500, on the other hand, gained 60.18 points, or 1.8 percent, to end at 3,408.60 while the Nasdaq composite climbed to 257.47 points, or 2.3 percent, for a 11,332,49 close.
According to Chequers Financial Management's Nicole Tanenbaum, improvements in Trump's health and rising hopes brought about the continued negotiations for a second COVID-19 stimulus package are powering the market rally today.
She also added that market jitters are being calmed by the widening lead of Democrat presidential candidate Joe Biden over Trump, who is seeking a second term at the White House.
However, Tanenbaum joined other analysts in saying that the volatility of the U.S. stocks will continue as investors will continue to watch over Trump's health improvement in the coming days, the passage of a second stimulus package and clarity about the election.
The global market has also reacted to Trump's return to the White House with the European stocks edging lower on the morning of Tuesday.
On Monday, Global markets had rallied as investors were keenly watching the president's health condition and early Tuesday saw the pan-European Stoxx 600 reversed opening gains to hover at 0.2 percent below the flatline in early trade. Travel and leisure stocks also added 1 percent while health care stocks fell 0.7 percent.
BTIG equities and derivatives head, Julian Emanuel, said Friday last week that the markets would be closely monitoring updates of Trump's health in the coming days and the severity of his COVID-19 infection.
There have been concerns that the U.S. stocks would be affected by his COVID-19 infection and might derail whatever recovery that the U.S. economy has gained.
September had been a tumultuous month for trading after the explosive gains during the summer and high unemployment rates tempered hopes for economic recovery.
The increasing number of COVID-19 positive cases and deaths also added to the volatility as well as the contradicting messages from drugmakers and Trump as to when an approved and effective vaccine will be available.
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