(Bloomberg) — Stocks fell amid warnings from Federal Reserve officials on the need for more stimulus to lift the economy from a coronavirus-induced recession. The dollar climbed.
Fed Chairman Jerome Powell reiterated his view that the economy has made substantial progress, but plenty is left to do, while Vice Chairman Richard Clarida said “additional fiscal support will likely be needed” to bolster the recovery. The S&P 500 dropped, led by energy and tech shares. Tesla Inc. dragged down the Nasdaq 100 after its “Battery Day” event fell short of expectations. The Dow Jones Industrial Average outperformed on solid earnings from Nike Inc. and a rally in Johnson & Johnson amid its first big U.S. trial of a Covid-19 vaccine that may work after just one shot.
Traders will also sift through comments from several other central bank officials including Eric Rosengren from Boston, Mary Daly from San Francisco and Charles Evans from Chicago.
“If stimulus doesn’t happen, if a deal doesn’t get reached, I think we’ll see a more significant turn to the downside,” said Nick Giacoumakis, president of New England Investment and Retirement Group. “We’re going to be in for a choppy, volatile fall as we get closer to the election. Right now, there are just a lot of unknowns, and that’s the reason for the volatility.”
The U.S. House passed a stopgap funding bill to keep the government operating through Dec. 11 after both parties in Congress and officials at the White House struck a deal to provide aid to farmers and food assistance for low-income families. The decision sends the temporary spending bill to the Senate for a vote before the fiscal year ends on Sept. 30. Final passage would avert a government shutdown just before the Nov. 3 election.
These are some events to watch this week:
U.S. initial jobless claims are due Thursday.
Here are some of the main moves in markets:
The S&P 500 decreased 0.4% as of 11:01 a.m. New York time.The Stoxx Europe 600 Index gained 0.9%.The MSCI Asia Pacific Index fell 0.1%.
The Bloomberg Dollar Spot Index increased 0.5%.The euro fell 0.4% to $1.1665.The Japanese yen depreciated 0.4% to 105.34 per dollar.
The yield on 10-year Treasuries rose one basis point to 0.69%.Germany’s 10-year yield fell less than one basis point to -0.51%.Britain’s 10-year yield climbed one basis point to 0.216%.
West Texas Intermediate crude rose 1.3% to $40.33 a barrel.Gold depreciated 1.8% to $1,866.38 an ounce.Silver depreciated 5.5% to $23.05 per ounce.
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