On Wednesday, equities made a return as investors became more hopeful about a debt ceiling resolution and piled into technology companies.
The Dow Jones Industrial Average closed up 0.30%, recouping a 459-point drop earlier in the day. After dropping 1.27% to its session low, the S&P 500 gained 0.4%. After falling as much as 1.2%, the technology-focused Nasdaq Composite rebounded 0.5%.
After Senate Minority Leader Mitch McConnell informed Republicans that he would give a short-term debt limit extension later Wednesday, stocks reversed course. This would ease some of the pressure on Congress to prevent a U.S. default, which is now looming.
Some essential technology stocks were acquired on the dip by investors. Microsoft gained 1.5%, and Amazon gained about 1.3%. The FAANG stocks all ended the day in the green.
In the meanwhile, many securities linked to the economic reopening fell. Following a downgrade by Goldman Sachs, shares of American Airlines and JetBlue sharply fell. Goldman highlighted higher gasoline prices and weaker near-term demand.
Concerns about increasing interest rates, rising inflation, and the debt ceiling are fueling October’s volatility. The Dow has risen 483 points, dropped 324 points, and surged 312 points in October’s three previous trading days. The Dow moved more than 550 points on Wednesday.
We’ll be keeping a close eye on the markets this month. How’s your portfolio doing?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.