Dow industrials drift lower as Wall Street braces for Trump-Biden showdown

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Dow industrials drift lower as Wall Street braces for Trump-Biden showdown

U.S. stocks were seeing muted moves Tuesday, hanging not far from break-even levels as investors awaited the first presidential debate ahead of the November elections, a number of important economic reports, and a barrage of speakers from the Federal Reserve.
How are stock indexes performing?

The Dow Jones Industrial Average DJIA, -0.14% fell 49 points, or 0.2%, at about 27,541; while the S&P 500 index SPX, -0.04% was ES00, 0.19% a point lower, or less than 0.1%, at about 3,350, and Nasdaq Composite Index COMP, +0.02% NQ00, -0.41% ticked 8 points, or less than 0.1%, higher at roughly 11,126.

On Monday, the S&P 500 rose 53.14 points, or 1.6%, to end at 3,351.60. The Nasdaq climbed 203.96 points, or 1.9%, to close at 11,117.53. The Dow advanced 410.10 points, or 1.5%, finishing at 27,584.06, while booking its third session of gains in a row.

The Russell 2000 index RUT of small-capitalization companies outperformed, booking a 2.4% gain to close at 1,510.35.

What’s driving the market?

After a positive start to kick off the past week of trading in September, major equity-index futures were drifting slightly lower, with the global tally of COVID-19 deaths surpassing a milestone of one million.

The handling of the pandemic and plans for the U.S.’s economic recovery are likely to be some of the topics featured at the presidential debate between Republican President Donald Trump and Democratic challenger, former Vice President Joe Biden in Cleveland late Tuesday. The U.S. has the highest case tally at 7.1 million, and highest death toll at 205,085 of any country.

Investors will be keying in on further guidance on new policy measures from Trump and more signs that Biden is prepared to take the reins as commander-in-chief should he prevail in the November contest.

Overall, the debate which starts at 9 p.m. Eastern Time could help to set the tone for markets for the next 35 days until the Nov. 3 presidential election.

Monday’s action marked two days of gains of greater than 1% for the three U.S. stock index benchmarks and investors.

Peter Cardillo, chief market economist at Spartan Capital Securities, said that “after two days of a back-to -back rallies investors are not likely to over extend the climb, as this evening political event enhances a steady to mixed market session,” referring the debates.

Meanwhile, House Democrats released a $2.2 trillion bill for a coronavirus-relief package late Monday but the prospects of getting additional funding appear to be dimming as the focus in Washington shifts to the fight over Trump’s Supreme Court nominee Amy Coney Barrett, who was named by the president on Saturday to fill the vacancy left by the death of Ruth Bader Ginsburg.

Still, reports indicate that House Speaker Nancy Pelosi will discuss the new fiscal aid proposal with U.S. Treasury Secretary Steven Mnuchin early Tuesday in a last-ditch effort to revive those drawn-out negotiations. Additional support from the government for businesses and the unemployed due to the COVID-19 pandemic has been viewed as central to helping support the next phase of the economic recovery from the pandemic. However, new legislation from Democrats has been met with resistance from Republican Senators opposed to a large new round of deficit spending.

In economic reports, U.S. trade deficit in goods rose 3.5% in August to $82.9 billion, advanced U.S. wholesale inventories increase 0.5% on that month, while U.S. retail inventories climbed 0.8% last month.

Separately, home prices rose 4.8% in July, up from 4.3% in the prior period, according to a three-month average reading from Case-Shiller’s national price index, buttressed by superlow mortgage interest rates.

A reading of consumer confidence is set to be released at 10 a.m.

The day will also will be marked by stream of Fed speakers, including Philadelphia Fed President Patrick Harker. who was set to speak at 9 a.m., at the central bank’s Official Monetary and Financial Institutions Forum. New York Fed President John Williams will be featured in a “fireside chat’ sponsored by the Fischer Center for real estate and urban economics at 1 p.m., while Fed Vice Chair Randal Quarles will discuss financial stability with Harvard Law School also at 1 p.m. and he will speak with the University of Maryland at 3 p.m.