September 22, 2020
A late-day rally in technology stocks yesterday helped the U.S. equity market partially recover from a deep mid-day decline. Plunging nearly 1,000 points, the Dow finished the day down 509.72 points, or -1.84%. The S&P 500 followed the same path, recovering form mid-day lows to finish down 38.41 points, or -1.16%. The NASDAQ once again proved the resiliency of the technology sector, almost making its way back to positive territory. For the day, the NASDAQ finished down only 14.48 points, or -0.13%.
Coming off its September 2 highs, the markets have struggled for the last three weeks and dramatically changing the year-to-date performance for stocks. The Dow is now down 4.87% YTD, while the S&P 500 is hanging on to a gain of 1.56%. Enduring a rout in big cap tech stocks in recent weeks, the NASDAQ is still up 20.13% for 2020.
“Coronavirus concerns have resurfaced, worrying investors that a reversal in reopening progress could be near,” said Lindsey Bell, chief investment strategist for Ally Invest. “More and more uncertainty is rising as we get closer to the election but no closer to Congressional fiscal relief. But we’re still optimistic this dip will be bought sooner rather than later.”
Investors will be watching Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin testify before Congress today. Powell is expected to say that although unemployment and economic activity have improved from second quarter lows, further recovery is uncertain without further monetary and fiscal stimulus.