S&P 500 Completes Comeback, Comes Within a Hair of Record High
The S&P 500 Index came within 0.2% of its all-time closing high on Tuesday.
Wall Street’s benchmark index is up 50% from its March low.
The CBOE VIX is trading at five-and-a-half-month lows before rebounding sharply in afternoon trading.
The Dow and broader U.S. stock market turned lower Tuesday afternoon, negating what could have been a new six-month high for the S&P 500. A key measure of market volatility fell to its lowest level in over five months before reversing course later in the afternoon.
S&P 500 Index Approaches New All-Time High
The broad S&P 500 Index of large-cap stocks rose by as much as 0.5% to 3,378.84. In doing so, it came within 0.2% of the February 19 high.
The benchmark index tumbled down the stretch and eventually closed down 0.8% at 3,333.69.
The Dow Jones Industrial Average rose by as much as 361 points before reversing gains. The Dow settled down 104.53 points, or 0.4%, at 27,686.91.
Meanwhile, the technology-focused Nasdaq Composite Index fell 1.7% to 10,782.82.
Trading volumes have eased this month due to the summer vacation season. Low volumes are expected to persist until after Labor Day. September and October are typically much more volatile for U.S. equities.
Optimism Prevails–For Now
The S&P 500 snapped a seven-day winning streak, which was underpinned by improved investor sentiment towards the economy and pandemic. Calmer trading conditions also reflected in the CBOE VIX, which tracks expected volatility over the next 30 days.
On Tuesday, the VIX bottomed at 20.28, the lowest since February. The losses proved short-lived as the VIX rocketed 8.6% higher by the close.
Markets are assuming that ultimately Congress will come through with a package, and that there’s a lot of brinkmanship going on.
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Democrats in Congress are backing a $3.5 trillion stimulus bill, which is much higher than the one put forward by Republicans.