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(Reuters) – Wall Street dropped on Wednesday, led lower by Amazon and Microsoft, as investors lost hope that a fiscal stimulus would be approved before the presidential election in November.
FILE PHOTO: The front facade of the New York Stock Exchange (NYSE) is seen in New York City, New York, U.S., June 26, 2020. REUTERS/Brendan McDermid
Downbeat comments from Treasury Secretary Steven Mnuchin that a deal would not likely be made before the vote added to fragile sentiment following a mixed bag of quarterly earnings reports from major Wall Street lenders.
“At this point getting something done before the election and executing on that would be difficult, just given where we are and the level of detail, but we’re going to try to continue to work through these issues,” Mnuchin said at a conference sponsored by the Milken Institute.
U.S. stocks had rallied in recent sessions on optimism that the government would provide a fresh stimulus to reduce damage caused by the coronavirus pandemic.
“Optimism took hold like a rocket last week and now it’s coming back down to earth a little bit,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York. “I think a stimulus as a large macro event is already baked into stock prices. It’s just a question of when the details emerge and when the stimulus goes into effect.”
Amazon dropped 2% and Microsoft fell 0.8%, both weighing more than any other stocks on the S&P 500.
The Dow Jones Industrial Average was down 0.56% at 28,520.54 points, while the S&P 500 lost 0.66% to 3,488.78.
The Nasdaq Composite dropped 0.85% to 11,763.32.
Bank of America and Wells Fargo tumbled 4% and 5%, respectively, after a disappointing quarterly results, while Goldman Sachs rose 0.5% as strength in its trading business helped its quarterly profit surge