A lack of progress on the stimulus front continues to exert downside pressure on U.S. stocks.
The Dow and broader U.S. stock market tumbled on Wednesday after Treasury Secretary Steven Mnuchin warned that a new stimulus deal is unlikely to be passed before the presidential election.
All of Wall Street’s major indices reported declines, with the Dow Jones Industrial Average (DIA) falling 154.81 points, or 0.6%, to 28,514.00.
The broad S&P 500 Index (SPY) of large-cap stocks declined 0.7% to close at 3,488.67. Eight of 11 primary sectors reported losses, with communication services and consumer discretionary leading the pack. On the opposite side of the ledger, shares of energy, industrials, and materials companies rose.
Meanwhile, the technology-focused Nasdaq Composite Index (QQQ) closed down 0.8% at 11,768.73.
A measure of implied volatility known as the CBOE VIX (VXX) rose for a third straight session on Wednesday. The so-called “investor fear index” peaked at 27.23 on a scale of 1-100 where 20 represents the historical average. VIX would eventually settle up 1.1% at 26.35.
Markets were on edge Wednesday after Treasury Secretary Steven Mnuchin said it “would be difficult” to reach a comprehensive stimulus package before the November 3 election. The Trump administration has offered Democrats a $1.8 trillion stimulus bill to counter their $2.2 trillion offer.
The Final Word: With less than three weeks before the U.S. presidential election, Congress remains deadlocked on a new stimulus bill. Meanwhile, Democratic candidate Joe Biden has taken a decisive lead in the polls, raising the possibility of a swift election outcome on November 3.