Major Stock Market Indices Could Close Out Best Month So Far in 2020
The United States’ major equity benchmarks are on track to end their best month so far in 2020.
On Monday morning, futures tied to the Dow Jones Industrial Average improved 0.1%, or 29 points, while S&P 500 futures jumped 0.12%, or 4.35 points, and futures for the Nasdaq Composite climbed 0.19%, or 22.5 points. It marks the eighth session in a row that stock indices rose in premarket trading and the advancements are likely to continue following the opening bell.
Last week, both the S&P and Nasdaq hit all-time highs, while the Dow is now within 3% of its record close in mid-February. The Dow and S&P are also on pace for their best August since 1984, and the Nasdaq could notch its best monthly performance since 2000. Economists have pointed out factors including the Federal Reserve’s new monetary policy approach to help the struggling labor market, progress in the development of possible COVID-19 vaccines and constructive trade talks between Washington and Beijing as reasons for the solid growth.
However, threats to the market remain: In September, congressional leaders are expected to return after a recess in August and resume discussions regarding a new stimulus package to bolster the battered U.S. economy. The federal government’s CARES Act, which provided financial relief to individuals and businesses impacted by the pandemic, expired for the most part at the end of July, and Democrat and Republican lawmakers have so far been unable to agree on another plan.
What’s more, a potential spike in the number of coronavirus infections across the country in the fall months ahead could lead to renewed lockdowns, stay-at-home orders and restrictions on nonessential businesses. Such a scenario could push many Americans back to unemployment as well as dent discretionary spending.
On Friday, the Department of Labor reported that more than a million people filed for unemployment benefits on a seasonally adjusted basis in the week ended Aug. 22, while continuing claims remained high at 14.5 million. Although many businesses have reopened and workers are returning to their posts, economic activity is still well below levels prior to the coronavirus outbreak. In late June, the Commerce Department reported that gross domestic product, which measures the output of U.S. goods and services, contracted at a seasonally adjusted annual rate of 5% in the first three months of the year. It marked the economy’s sharpest quarterly plunge since the 8.4% fall in the fourth quarter of 2008 at the height of the Great Recession.
More from Footwear News
UPDATED: Stocks Seesaw on Trade Talks, Potential Coronavirus Vaccine and More
Struggling Tailored Brands Is at Risk of Being Delisted From the NYSE
Sign up for FN's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
