Stock Market Posts Worst Losses Since June

October 29, 2020
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The stock market suffered a sharp selloff on Wednesday, with investors concerned about a resurgence in coronavirus infection numbers and the return of sweeping lockdown measures in Europe. The upcoming Presidential Election is also causing uncertainty.

Both the Dow Jones and S&P 500 were down yesterday. Here’s what investors need to know about the news.

Dow Jones and S&P 500 Fall During Wednesday Trading

Two of the major benchmark indexes fell heavily on Wednesday, with investors losing confidence in the strength of the American and wider global economy.

  • The Dow Jones Industrial Average (DJIA) was down -3.43% or -943.24 points at the close of trading.
  • The S&P 500 (SPX) was down -3.53% or -119.65 points at the close of trading.
  • The NASDAQ Composite (COMP) was down -3.73% or -426.48 points at the close of trading.

These losses can be attributed to some of the biggest news stories of the week.

Uncertainty still shrouds the Presidential Election, with investors uncertain of the policies that could affect businesses in the coming years. President Trump, as the incumbent, would traditionally have an advantage. However, former Vice President Joe Biden is leading in the polls, and his momentum threatens some of the key swing states.

Analysts can’t say with any certainty how America will vote. Polls don’t translate to success, as was seen when President Trump won his first term.

News out of Europe has also rattled investors. Coronavirus cases are rising and hospitals are again being overrun with patients suffering from moderate and critical symptoms. France announced a four-week nationwide lockdown yesterday, which could threaten Europe’s economic recovery.

Coronavirus cases in the U.S. are also increasing, and some hospitals are seeing conditions similar to the beginning of the pandemic. America is currently averaging 69,000 new cases each day, which could lead to restrictions on movement or targeted lockdowns in hotspots.

Volatility Could Remain in November

Despite some huge comebacks and gains for investors, the stock market has been volatile throughout 2020. The world is facing an unprecedented pandemic that threatens global commerce and growth.

For investors, it’s time to reevaluate portfolios. There are value picks to be had within the current dip. Each investment should be carefully considered based on the conditions today, and potential growth in the future. A Coronavirus vaccine could be made available early in 2021, which would alleviate much of the uncertainty that markets face today.

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