Market Snapshot: Dow skids over 500 points and stocks tumble as control of Congress remains unsettled

by | Nov 9, 2022 | Stock Market

Stocks were trading near session lows Wednesday afternoon, a day before the October consumer inflation report and as tight races in midterm elections left control of the U.S. House and Senate up for grabs. How are stock indexes trading
The Dow Jones Industrial Average
DJIA,
-1.64%
dropped 548 points, or 1.7% to around 32,611

The S&P 500
SPX,
-1.76%
 shed 63 points, or 1.7% to around 3,764

The Nasdaq Composite went down 218 points, or 2.1% to 10,396

On Tuesday, the Dow Jones Industrial Average 1%, the S&P 500 increased 0.6% and the Nasdaq Composite gained 0.5%. The S&P 500 remains down 20% for the year to date.

What’s driving markets Stock indexes fell further Wednesday afternoon, ahead of the consumer price index data for October due Thursday and as the results from the U.S midterm elections trickled in but the battle to control Congress remained unclear. “Stocks saw a run up on the rumor of a Republican wave, but investors are selling the news on election results,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. The S&P 500 index rallied over the past three sessions, partly on hopes that gains for the Republicans might deliver partisan gridlock in Washington. A popular view on Wall Street has been that a divided government could be beneficial for equity valuations since it may reduce regulatory uncertainty, crimp the likelihood of more corporate taxes, and mean less government spending, which should help undercut inflation. In turn, less inflation could, at the margin, reduce the need for the Federal Reserve to continue to raise interest rates aggressively. The S&P 500 is down nearly 20% in 2022 as the Fed has raised its benchmark interest rate from effectively zero at the start of March to a range of 3.75% to 4%. However, Richmond Fed President Thomas Barkin on Wednesday said the Fed shouldn’t stop raising interest rates for fear of sparking an economic downturn because it risks inflation coming back even stronger, requiring even stricter measures dow …

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