Stocks fell Tuesday, after posting big gains of late.
All three major U.S. indices fell, with the S&P 500 down about 0.65%. The 10-Year Treasury yield fell to 0.67%. Yields fall when prices rise.
The S&P 500 is up a bit more than 5.5% since June 26, as hopes for more fiscal stimulus, some of which may be on the way for small businesses, have carried market sentiment while virus cases climb and states pause reopening plans.
Also, Vice President Joe Biden’s chances of winning the 2020 presidential election are improving and although he would like to raise corporate taxes, among other business-unfriendly moves, stocks keep climbing.
Recently, stocks and President Trump’s election chances have decoupled. Biden’s chances are at 56%, according to RealClearPolitics, with Trump’s at 39%. “There is rising voices from investor communities that the Biden victory wouldn’t be so bad for the stock markets,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote Bank in emailed remarks to reporters.
"This hints that investors are ready to carry the actual stock rally to higher levels no matter what. Rising coronavirus cases and health risks amid premature business reopening, US election uncertainties or downgraded revisions to the economy; nothing matters,” Ozkardeskaya added. That point further proves Tuesday’s losses may represent a mere pause in the rally from recent gains.
Cyclical sectors like oil, banking, consumer discretionary and industrials fell more than 1%, while losses in the recently-favored tech sector were less severe. Bed, Bath and Beyond (BBBY) - Get Bed Bath & Beyond Inc. Report will report earnings Wednesday and fell 2.7%.
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