The Dow futures climbed 198 points. Both S&P 500 futures and Nasdaq 100 futures also trade in positive territory.
White House Chief of Staff Mark Meadows told reporters that US President Donald Trump has extended a proposal for more than $ 1.5 trillion in incentives. No further details were given on the exact figure, except that anything $ 2 trillion and more would be a “real problem”.
Meadows also said the most recent proposal included $ 20 billion for airlines to give them a six-month extension to lay workers.
The development came after the House of Representatives Nancy Pelosi and Treasury Secretary Steven Menuchin delayed the vote on a $ 2.2 trillion rescue package after the House of Representatives failed a coronovirus aid deal; However, the pair said the talks would continue.
The Federal Reserve on Wednesday said it was increasing restrictions on large bank dividends and buybacks during the fourth quarter. Banks drowned in expanded business following the announcement of the central bank.
On Wednesday, the Dow Jones Industrial Average rose more than 300 points, exceeding the 550 mark as expected, after the White House and Senate would agree to a second stimulus package.
The S&P 500 also recorded a gain, climbing over 0.8%. Nasdaq Composite gained 0.75% due to gains in Netflix and Microsoft.
Stocks that hinge on economic recovery – like airlines and cruise lines – lost steam after negative stimulus headlines. Airlines are on the verge of retrenching tens of thousands of employees without government support.
US President Suzanne Schmidt told CNBC, “Given the lawmakers’ failure to make any progress, there is no doubt that any agreement can be reached before the November election.” “Investors are entering the final quarter of the year and expect volatility to persist and acknowledge that not owning the winners this year has had a detrimental impact on their portfolio. ”
Despite Wednesday’s rally, stocks pulled out with losses, the first month of decline since March.
The Dow Jones Industrial Average lost about 2.3% in September, a generally weak month for equities. The S&P 500 fell 3.9% this month. The technology heavy Nasdaq composite dropped 5.2% since September 1, a technology stock dragged down by weakness. However, all three major averages posted strong gains for the third quarter.
Investors also digested a presidential debate between Donald Trump and Joe Biden on Tuesday evening.
Barry Sternlicht of Starwood said the stock market would suffer from a Democratic sweep on Wednesday.
“Maybe a long-term, two, three-year Democratic sweep is fine but with a change in short-term, capital gains taxes, I think whenever you announce a winner in November, you are a very important figure in high-flying stocks. Will see improvement., “Starwood Capital Group chairman and CEO said at the Delivering Alpha conference presented by CNBC and the institutional investor.
In contrast, Social Capital founder and CEO Chamath Palihipitiya said the stock market will continue to boom regardless of Trump or Biden’s presidency. The outspoken technology investor said that with rates near zero, investors would need to find growth in the equity market.
Positive coronovirus vaccine news also hit the equity on Wednesday. Regeneron treatment improves sympathy in non-hospitalized patients, and Modern’s vaccine shows signs of functioning in older adults, according to a study. The Financial Times reported on Wednesday that the modern vaccine would not be ready before the November election.
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