The Stock market rebounded on Wednesday, following one of the worst single-day drops in recent months.
Shortly after President Trump announced that he was ending all stimulus negotiations with lawmakers, he reversed his position by announcing his support for stimulus checks, an airline bailout, and small business protection.
Here’s how it happened, and how the markets responded.
Trump Supports Individual Stimulus Measures
President Trump said this week that Democrats in Congress have been negotiating in bad faith and that he would cease all Coronavirus stimulus negotiations until after the election. The stock market responded with some indexes falling almost 400 points on Tuesday.
Trump then reversed his position on Wednesday, releasing a series of tweets with support for individual stimulus measures.
Included in his posts were support for:
- Another round of $1,200 stimulus checks for households.
- $135 billion in funding for the Paycheck Protection Program for small businesses.
- $25 billion in bailouts for airline payroll support.
Some analysts described Trump’s Tweets as political maneuvering, and likely a response to the rapid decline in stock prices on Tuesday. Whatever the motivation, the President’s abrupt change in messaging did have a positive impact.
Markets Closed Higher on Wednesday
All major indexes posted single-day gains on Wednesday, reversing the losses from earlier in the week.
- The NASDAQ Composite (COMP) closed with a 210 point or 1.88% gain.
- The S&P 500 (SPX) closed with a 58 point or 1.74% gain.
- The Dow Jones Industrial Average (DJIA) closed with a 530 point or 1.91% gain.
Investors will be relieved to see the turnaround in the market, but volatility could remain a factor throughout the leadup to the election.
Tech Stocks Came Back Strong
The largest growth stocks were some of the biggest gainers on Wednesday, reinforcing the fact that tech is driving the stock market forward.
- Microsoft (NASDAQ: MSFT) gained 1.90%.
- Apple (NASDAQ: AAPL) gained 1.70%.
- Amazon (NASDAQ: AMZN) gained 3.09%.
With political news having more of an impact on stocks than ever, investors should follow the cycle closely. Any major change in policy or messaging could have an impact on prices.
As was seen earlier this week, the words of the President can have a direct impact on the value of American equities, and the sentiment of the market as a whole.
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