Wall Street is having its worst week and worst month since March

Posted on Oct 31, 2020 at 11:24 am

Bad luck for the American financial markets. The combination of announcements deemed disappointing from the tech giants, a record number of new coronavirus contaminations in the United States and the nervousness and uncertainties linked to the presidential election of November 3, have strained the nerves of operators fellows.

For its penultimate session before the electoral ballot between Republican President Donald Trump and Democrat Joe Biden, the flagship Dow Jones Industrial Average, finished down 0.59% to 26,501.60 points.

The biggest decline since the outbreak of the epidemic in the United States

Over the week, the flagship Dow Jones index lost 6.5%, while the Nasdaq, where technology stocks are concentrated, and the broader S&P 500 index were down 5.5% and 5.6%. Over the month, the Dow Jones lost 4.61%, while the Nasdaq dropped 2.29% and the S&P 2.77%. This is their biggest decline since the outbreak of the epidemic in the United States in March.

US stocks “added heavy weekly losses to end the month,” Schwab analysts summarize. For them, “global unease persists over the impact of a resurgence of new cases of Covid-19 in the United States and Europe, exacerbated by growing uncertainty ahead of the presidential election next week.”

The tech sector under surveillance

Despite the rebound in US growth in the third quarter announced Thursday, despite the results of the big names in tech deemed rather good, investors have focused their attention on negative aspects such as uncertain forecasts disclosed by companies.

The technology sector and the Nasdaq, which fell more than 3% during the session, pulled the indices down. In the lead, Twitter (-21.11%) was punished because of a slow growth of its users, despite an increase in advertising revenue.

The VIX, dubbed the fear index, which measures the volatility of the New York Stock Exchange, rose 1.14% to 38 points, near its four-month peak, suggesting that brokers and investors remain concerned.

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