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28.10.202014:11 Análisis del mercado Forex: US stock market fluctuates due to coronavirus and upcoming US elections

US stock markets were subject to fluctuations on Tuesday, closing with mixed performances after a synchronous decline the day before.

The Dow Jones index dropped 0.8% (222.19 points) and closed around 27463.19 points (note that since the beginning of this year, DJIA has decreased by 3.8%), while the NASDAQ index, on the contrary, increased by 0.64% (72.41 points ) and closed at 11,431.35 points. Meanwhile, the S&P 500 index fell by 0.30% (10.29 points) and reached 3390.68 points.

Exchange Rates 28.10.2020 analysis

The simultaneous drop in the indices the day before was largely due to the record increase of coronavirus cases around the world, which continues to worry the markets, because the re-introduction of restrictive measures will seriously slow down economic development.

However, at the same time, the upcoming US presidential elections have brought excitement to the stock exchanges. Thus, there is strong volatility in the markets, and vague prospects regarding the US stimulus package only boosts it.

Nevertheless, the main driver of the markets is still the situation with the coronavirus, which continues to deteriorate, as cases have reached a new peak and incidence in the United States broke a weekly record. Italy, Spain and many other states have already tightened restrictive measures in the hopes of curbing the spread of the virus.

Despite this negative outlook, many experts believe that the market will confidently recover next year, and in some places will show an unprecedented rise. They say that volatility and returns will even go back to historical norms.

Following this, some investors hope that the governments will not resort to severe quarantine, and with it, avoid a catastrophic decline in economic activity.

The current improvement of economic indicators, say for example, US durable goods, are giving optimism to the stock market, especially since the index continues to increase for the fifth month in a row (compared to August, a 2% growth was recorded for September).

Tech stocks were also relatively positive on Tuesday, particularly in response to news from Advanced Micro Devices. The corporation said it plans to buy rival chipmaker, Xilinx, for $ 35 billion, so as a result, Xilinx rose 8.6% and AMD declined 4.1%.

Shares of individual companies also dramatically changed due to the publication of financial statements. For example, Eli Lilly shares declined 6.9% after lowering the profit forecast for 2020.

Meanwhile, the pan-European Stoxx Europe 600 lost 0.9%, while Caterpillar shares fell 3.2%.

As for Microsoft, growth associated with the pandemic was reported. The company noted an increase in demand for cloud computing services amid the shift of office workers to remote work. In this regard, the company's securities rose in value by 0.3%.

Many major tech companies, including Apple and Amazon.com, have pledged to submit their financials by the end of this week.

In Asia, key indices, for the most part, declined by Tuesday evening. The Hong Kong Hang Seng fell 0.5%, the Japanese Nikkei 225 remained unchanged, and the Shanghai Composite rose 0.1%.

Irina Maksimova,
Experto Analítico
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