Dow Jones Industrial Average plunged 5 points, or less than 0.1%. Futures on S&P 500 and Nasdaq 100 were also slightly lower.
These orders extend the distribution of expanded unemployment benefits, postpone student loan payments until 2020, extend a federal moratorium on evictions and provide for a payroll tax holiday. However, unemployment benefits will be maintained at a reduced rate of $ 400 per week. Originally, the benefit offered workers affected by the pandemic $ 600 per week.
Trump’s measures come after congressional leaders failed to make progress on a new coronavirus stimulus package last week. Several benefits from a package signed earlier in the year expired at the end of July, increasing uncertainty over the future of the US economy.
“The fiscal cliff is still a downside risk for August,” said Aneta Markowska, chief financial economist at Jefferies. Markowska added, however, that any weakness in this will be “short-lived”.
“By September, another round of budget support will create positive momentum. The reopening of schools, even if only in some states, will strengthen the positive dynamic by (1) stimulating back-to-school purchases and (2) allowing more parents to return to work in September, ”he said. she stated in a note to customers. “The bottom line is, all the stars align for another inflection point in activity and a second step in reopening. ”
Wall Street was coming off a strong weekly performance. The Dow Jones rose 3.8% last week for its biggest weekly gain since June. The S&P 500 climbed 2.5% with the Nasdaq Composite. Last week’s gains come during a historically difficult time for the market, as August marks the start of the worst three-month period for the S&P 500.
Those gains were driven in part by Facebook, Apple and Microsoft, all of which rose more than 3% last week. They also left the S&P 500 just 1.2% below its February 19 high.
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