Dow futures spiked after Trump’s top economic advisor Larry Kudlow unveiled a gigantic $6 trillion stimulus package for the U.S.
- Dow futures rallied after Donald Trump’s top economic adviser unveiled a massive $6 trillion stimulus package for the U.S. economy.
- These gains rapidly faded, as the stock market failed to move higher after a historic day for the Dow Jones on Tuesday.
- Worryingly for Wall Street, there doesn’t appear to be a Plan B if the fiscal package doesn’t push stocks higher longer-term.
After the largest single-day point rally in the history of the Dow Jones, the stock market failed to extend the move overnight despite a brief spike.
The volatility came after President Trump’s top economic adviser touted an incredible $6 trillion stimulus package for the United States.
Dow Futures Fall After Historic Rally
All three of the major U.S. stock futures indices popped and dropped Tuesday evening, after initially rallying in the wake of a multi-trillion-dollar stimulus announcement.
In the commodity sector, the price of oil ticked up 2.5% above $24 a barrel, while gold continued its impressive rally with another 1.5% gain.
Strong showings from Chevron (CVX), American Express (AXP), Nike (NKE) and Boeing (BA) in the stock market today lifted the Dow Jones industrials to a gain of around 8.5%. The S&P 500 and Russell 2000 small-cap index rallied nearly 6.3% each, and the S&P 500 jumped more than 7%.
But one day of explosive gains doesn’t mean a new bull market is upon us. The stock market still needs to prove itself with a follow-through day.
Some of the worst performing industry groups in IBD’s database in recent weeks were some of the best gainers Tuesday. IBD’s airline group soared more than 20% amid hopes for a coronavirus stimulus package. American Airlines (AAL) was a top percentage gainer in the Nasdaq 100, up more than 25%.
Casino operators, which have been thrashed just as hard as airlines stocks of late, also rallied sharply. Gold miners and homebuilders also outperformed.
The Dow Jones Industrial Average sank more than 2,000 points on Monday, notching its worst day since 2008, as market angst over the spread of the new coronavirus and a new oil price war sent investors scrambling for safety.
The Dow tanked more than 2,000 points, or 7.7%, on pace for its worst day since December 2008. The S&P 500 plunged 7.6%. The 30-stock benchmark was down 2,158 points at its session low. The massive sell-off triggered a key market circuit breaker minutes after the opening bell. Trading was halted for 15 minutes until reopening at 9:49 a.m. ET.
The sharp declines followed a roller-coaster week that saw the S&P 500 swing up or down more than 2.5% for four days straight. While Monday’s drop was significant, it still didn’t crack the 20 worst days for the S&P 500.
Trading on the New York Stock Exchange was halted temporarily Monday after indexes plunged 7% in reaction to Saudi Arabia’s shocking oil-price cut. The financial market chaos comes amid increasing worries that the coronavirus epidemic will plunge the global economy into recession.
In early trading, the Dow Jones Industrial Average was down more than 1,900 points — more than 19% off its February peak. Stocks also fell sharply in Asia and Europe.
Later in the morning, the U.S. indexes recovered somewhat, with the Dow down nearly 1,600. Both the Dow and the S&P 500 were down about 6%.
- At around 1:34 a.m. ET, Dow futures rose 300 points, pointing to an implied opening gain of around 308 points.
- Futures on the S&P and Nasdaq both also jumped higher.
- The two sides agreed to hold another round of trade negotiations in Washington, D.C., towards the beginning of next month, and consultations will be made in mid-September in preparation for the meeting, according to a statement from China’s Commerce Ministry.
Labor Day is here, giving investors a brief respite from a topsy-turvy year defined by an on-and-off trade war, the Federal Reserve in the spotlight, inverted yield curves, and significant volatility.
But hardly every company is thriving. From retail to health care to consumer staples, here are the five worst performing stocks in the S&P 500 so far this year.
Macy’s stock (M) is the worst performer in the S&P 500 so far this year, down 49% through last week. The decline of malls in the U.S. have hammered the retailer.
US stocks rose after Europe and China announced plans for additional stimulus to shore up their economies in the wake of a global trade war.China’s National Development and Reform Commission said Friday it would boost stimulus to shore up the country’s economy, stabilize employment and give people more disposable income. Although China didn’t elaborate on its plans, that was enough to soothe investors’ fears about the trade war’s harm to the global economy.
A strong U.S. retail sales report during a week many retailers are announcing earnings helped stabilize the stock market Thursday after sharp losses the day before. The Dow Jones Industrial Average(DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) seesawed between gains and losses but rallied toward the end of the session.
Today’s stock market
Index Percentage Change Point Change Dow 0.39% 99.97 S&P 500 0.25% 7.00
A solid quarter but weak outlook from Cisco
Network equipment leader Cisco Systems reported fiscal fourth-quarter results in line with expectations, but flat orders and weak guidance raised investor concerns, sending shares down 8.6%. Revenue grew 4.6% to $13.4 billion and adjusted earnings per share rose 19% to $0.83. Analysts were expecting the company to earn $0.01 less per share on revenue of $13.4 billion.
Sales in the Americas, Cisco’s most important region at 61% of revenue, grew 8.9% in Q4. But revenue from Asia-Pacific fell 3.8%, and CFO Kelly Kramer said in the conference call that the company’s business in China plunged 25%. Overall, gross margin improved 90 basis points from last quarter and 230 basis points from the period a year ago. Orders were flat year over year, and Cisco guided to Q1 revenue growth of between 0% and 2%.
Cisco’s challenges are centered on sales to service providers, especially Chinese telecoms, and orders would have been up mid-single digits if it weren’t for a 21% drop in orders to that segment. Those struggles with service providers overshadowed the company’s success in other areastoday.
Dow Jones futures turned higher Thursday morning, along with S&P 500 futures and Nasdaq 100 futures. Futures plunged after Beijing vowed retaliation vs. the new Trump tariffs, escalating the China trade war just two days after President Trump offered a partial reprieve on new China tariffs. Stock futures turned higher after China urged the U.S. to “meet halfway” on trade along with strong Walmart (WMT) results. The stock market rally already is reeling from Wednesday’s inverted yield curve, raising recession fears.
The drop comes as some forecasters warn of increasing odds of a recession, while President Trump has continued to hammer the Federal Reserve over its handling of interest rates.
In terms of point losses, Wednesday’s drop was the Dow’s 4th worst-ever day, though it did not crack the top 20 list in terms of percentage drops.
The latest plunge came after the yield for 10-year Treasury bonds fell below that for 2-year bonds, an economic indicator that frequently predicts a coming recession.
An escalating trade war between the US and China threw the stock market into chaos early Monday.
The Dow Jones industrial average plunged more than 600 points after China said it will hike tariffs on $60 billion worth of US goods — a tit-for-tat response to President Donald Trump’s hike of tariffs on $200 billion in Chinese goods last week.
China said it will impose tariffs on its US imports of to up to 25 percent on June 1. Many of the items, which had been subject to 10 percent tariffs, affected the US agricultural industry.
The Dow was recently off 632.62 points, or 2.4 percent, at 25,309.75. Market indexes were all down sharply as of 11:38 am ET, with the S&P 500 and tech-weighted Nasdaq plunging 2.4 percent and 3.2 percent, respectively.