Stocks bounced back sharply Wednesday after an abrupt change in direction from President Donald Trump lifted investors’ hopes for at least some more fiscal stimulus. Investors sold off stocks Tuesday after he suddenly called off talks on a comprehensive coronavirus relief package.
But he later urged Congress to pass a series of standalone bills that would include aid for the embattled airline industry. That pushed up shares of United Airlines, Delta and American.
But RiverFront Investment Group co-chief investment officer, Kevin Nicholson says investors are betting on stimulus coming after the election.
“Markets are moving up because they believe that if you get a Democratic sweep that there’s going to be large scale stimulus as obviously Nancy Pelosi and the Democrats have passed bills in the House. So we think, they think you’ll have stimulus of a $2-$3 trillion package.”
Materials and cyclicals stocks led a broad rally. The Dow and Nasdaq gained nearly 2 percent. The S&P added 1-and-three quarters parent.
And shares of Eli Lilly rose. The drugmaker said it had submitted a request to the U.S. Food and Drug Administration for emergency use of its experimental COVID-19 antibody treatment.