The huge gain on Tuesday is supposed to be followed by some dip in the indices on Wednesday. Tuesday was a day one of its kind, as it brought huge gains for the DOW and S&P 500 index. It has been decades since such huge single-day gains were last witnessed in the stock market and hence traders and investors are happy with the vibe of positivity. However, given the trends of swings in the market, the decline is more or less expected because as of yet there is no solid reason why the market should be as strong as it was on Tuesday.
The sole reason why the market was so strong on Tuesday was the anticipation of the Congress passing a $2 trillion Coronavirus relief package for the country. The package would help the country to battle the ghosts of recession that have been brought by the Coronavirus recently. In late Tuesday, the futures of the US stock markets showed a slight dip and after showing a jump of around 400 points for DOW futures in the early hours, it retreated by 150 points or -0.7%. S&P 500 along with Nasdaq 100 were also reportedly down by at least 1% than their previous best on Tuesday itself during live trading hours.
Thought the future hints at a drop, it is possible that before the market closes on Wednesday, it will get another boost. If the Coronavirus relief fund is sanctioned, it will surely create havoc in the stock market and the indices will surge higher. The funding is set to assist the small businesses and those who seeking for loans in this moment of economic crisis. However, as the bill doesn’t focus much on the security of workers, the Democrats are stalling the bill from being sanctioned. In 24 hours, the final decision regarding the funding will be announced.
Also, America will soon resume work as per the statement made by Donald Trump. The pause and lockdown is affecting the economy in more than one way which is why in a span of the next 15 days, the normalcy is expected to return to the market.