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U.S. stocks were trading lower early Tuesday as investors awaited the first presidential debate ahead of the November elections, and digested economic data and comments from Federal Reserve officials.
How are stock indexes performing?
The Dow Jones Industrial Average DJIA, -0.53% was off 118 points, or 0.4%, at about 27,461; while the S&P 500 index SPX, -0.34% was ES00, -0.46% 11 points, or 0.3%, lower at about 3,340, and Nasdaq Composite Index COMP, -0.15% NQ00, -0.64% ticked 41 points, or 0.4%, lower at roughly 11,077.
On Monday, the S&P 500 rose 53.14 points, or 1.6%, to end at 3,351.60. The Nasdaq climbed 203.96 points, or 1.9%, to close at 11,117.53. The Dow advanced 410.10 points, or 1.5%, finishing at 27,584.06, while booking its third session of gains in a row.
The Russell 2000 index RUT of small-capitalization companies outperformed, booking a 2.4% gain to close at 1,510.35.
What’s driving the market?
After a positive start to kick off the past week of trading in September, major equity-index futures were drifting lower, with the global tally of COVID-19 deaths surpassing a milestone of one million.
The handling of the pandemic and plans for the U.S.’s economic recovery are likely to be some of the topics featured at the presidential debate between Republican President Donald Trump and Democratic challenger, former Vice President Joe Biden in Cleveland late Tuesday. The U.S. has the highest case tally at 7.1 million, and highest death toll at 205,085 of any country.
Investors will be keying in on further guidance on new policy measures from Trump and more signs that Biden is prepared to take the reins as commander-in-chief should he prevail in the November contest.
Overall, the debate which starts at 9 p.m. Eastern Time could help to set the tone for markets for the next 35 days until the Nov. 3 presidential election.
“Lastly, the first presidential debate is tonight and it should be very entertaining with lots of fireworks and gotchas,” wrote Paul Schatz, president of Heritage Capital in a recent blog post.
That said, Schatz said he believes there’s a low probability that the debate dictates what markets do subsequently. “I don’t care what the market does tomorrow; it won’t be because of the debate, regardless of what the pundits and media say,” he said.
Read: Here’s how the stock market tends to perform after the first presidential debates
Monday’s action marked two days of gains of greater than 1% for the three U.S. stock index benchmarks and investors.
Peter Cardillo, chief market economist at Spartan Capital Securities, said that “after two days of a back-to -back rallies investors are not likely to over extend the climb, as this evening political event enhances a steady to mixed market session,” referring the debates.
Meanwhile, House Democrats released a $2.2 trillion bill for a coronavirus-relief package late Monday but the prospects of getting additional funding appear to be dimming as the focus in Washington shifts to the fight over Trump’s Supreme Court nominee Amy Coney Barrett, who was named by the president on Saturday to fill the vacancy left by the death of Ruth Bader Ginsburg.
Still, reports indicate that House Speaker Nancy Pelosi will discuss the new fiscal aid proposal with U.S. Treasury Secretary Steven Mnuchin early Tuesday in a last-ditch effort to revive those drawn-out negotiations. Additional support from the government for businesses and the unemployed due to the COVID-19 pandemic has been viewed as central to helping support the next phase of the economic recovery from the pandemic. However, new legislation from Democrats has been met with resistance from Republican Senators opposed to a large new round of deficit spending.
In economic reports, U.S. trade deficit in goods rose 3.5% in August to $82.9 billion, advanced U.S. wholesale inventories increase 0.5% on that month, while U.S. retail inventories climbed 0.8% last month.
Separately, home prices rose 4.8% in July, up from 4.3% in the prior period, according to a three-month average reading from Case-Shiller’s national price index, buttressed by superlow mortgage interest rates.
And a reading of consumer confidence rebounded in September to a post-pandemic high. The index of consumer confidence rose to 101.8 this month from 86.3 in August, the Conference Board said Tuesday.
The day will also will be marked by stream of Fed speakers, including Philadelphia Fed President Patrick Harker. who was set to speak at 9 a.m., at the central bank’s Official Monetary and Financial Institutions Forum. New York Fed President John Williams will be featured in a “fireside chat’ sponsored by the Fischer Center for real estate and urban economics at 1 p.m., while Fed Vice Chair Randal Quarles will discuss financial stability with Harvard Law School also at 1 p.m. and he will speak with the University of Maryland at 3 p.m.
Which stocks are in focus?
- Shares of discount retailer Big Lots Inc. BIG, +3.57% rose nearly 6% Tuesday, after the company said it expects a big jump in third-quarter same-store sales and guided for per-share earnings that are well above the consensus.
- McCormick & Co. Inc. MKC, -2.00% posted better-than-expected earnings for its fiscal third quarter, resumed guidance and announced a 2-for-1 stock split, saying it is still benefiting from dining at home during the pandemic. Shares declined 2.4%.
- United Natural Foods UNFI, -11.52% reported quarterly earnings of $1.06 per share, beating the 74 cents a share consensus estimate. Shares were trading 12% lower.
- Tiffany TIF, -0.16% was countersued by France’s LVMH, which accused the jewelry retailer of mismanagement. Shares of Tiffany were off 0.1%.
- Walmart WMT, -0.45% shares slipped 0.1% lower as the retail behemoth was said to be in advanced talks to invest up to $25 billion in venture of Indian conglomerate Tata Group.
How are other assets trading?
The 10-year Treasury note yield slipped 1.5 basis points to 0.65%. Bond prices move inversely to yields.
U.S. benchmark crude futures for November delivery were trading 77 cents, or 1.9%, lower at $39.84 a barrel on the New York Mercantile Exchange, slipping below the $40 mark after gaining 0.9% on Monday. Gold futures picked up 0.7% to reach $1,894.70 an ounce.
In global equities, the Stoxx Europe 600 index slipped 0.3% and the U.K.’s FTSE 100 retreated 0.2%. Meanwhile in Asia, Japan’s Nikkei gained 0.1% and Hong Kong’s Hang Seng Index booked a 0.9% loss, while China’s CSI 300 000300, +0.21% rose 0.2% and the Shanghai Composite Index SHCOMP, +0.21% also rose 0.2%.
The ICE U.S. Dollar index DXY, -0.33%, a gauge of the greenback’s strength, was trading 0.4% lower on Tuesday and off 0.6% for the week.
