As investors looked forward to the developments in the stock market preceding the first presidential debate, they were left flustered as the argument turned nasty on early Wednesday morning.
The market appeared to be quite volatile as the futures first started to rise when the debate began but as it neared its end, the stocks had taken a blow. The Dow Futures dropped more than 300 points initially, with the S&P 500 and NASDAQ 100 futures also declining.
It stands unclear if the cause of this decrease in the market was the hostile debate between President Trump and Democratic Contender, Joe Biden. Various issues were mentioned during the debate including each candidate’s ability to manage the falling U.S economy as well as the ability to deal with the ever-increasing coronavirus pandemic.
However, at the end of the debate, the audience didn’t have anything concrete to take away with them and yet stand undecided who to vote for.
Managing Director at KKM Financial, Daniel Deming, revealed that these short-term volatility pressures will not be stopping in the near future after this debate. He further elaborated that this situation is creating even more uncertainty in the market than there already is.
The uncertainty that would result in the market if neither of the candidate’s yields has become a cause of anxiety for investors. Market strategists have voiced the same uneasiness as each result would bring its own pros and cons with it.
Some argued that the market moved in the favor of Biden.
“If anything the betting markets have moved slightly in the direction of Joe Biden and U.S. futures moved lower,” said Ian Williams, economics and strategy analyst at Peel Hunt. According to RealClearPolitics, in the recent polls, Biden came out with an average lead of 6.1 percentage points.
The future losses may point towards alarm that Joe Biden’s victory would result in higher corporate taxes and regulations, which consequently would have a negative effect on the stock market. In the meantime, investors await positive news from the attempts made by the U.S lawmakers for getting a coronavirus fiscal stimulus package approved.
The constructive data about a potential coronavirus vaccine by the Regeneron Pharmaceuticals may be the reason for keeping the losses in the market in check.
According to Regeneron Chief Scientific Officer George D. Yancopoulos, “The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response,”
However, as schools have started reopening, there are fears over the resurgence of the coronavirus cases. The Dow and the S&P 500 fell by 0.5%, while the NASDAQ composite dropped by 0.3%, breaking the three-day winning streak.
Globally, Europe is stuck in a similar situation as the coronavirus cases spike once again, being called the “second wave” by some.