Major U.S. stock indexes edged lower Tuesday, leaving the rally in equities on pause while lawmakers continue haggling over another economic package to combat the latest surge in Covid-19 cases.
The Dow Jones Industrial Average recently fell 44 points, or about 0.1%, to 30021, while the S&P 500 declined 0.3%. The Nasdaq Composite fell further, shedding 0.5%.
A multiweek spike in Covid-19 infections and hospitalizations has diminished investors’ prospects of a quick economic recovery. With cases rising across nearly every state in the U.S., several economists and investors say fresh fiscal stimulus from Congress is needed to keep the economy afloat.
“We’re not out of the woods yet. There is potential for further lockdowns, particularly in the U.S.,” said Georgina Taylor, a multiasset fund manager at Invesco.
Despite the rise in coronavirus cases, the U.S. stock market has managed to rally to new heights thanks to advances on the vaccine front, as well as brief signs of progress toward completing another economic aid package. Investors remain bullish about next year, pinning their hopes for further gains on a rebound in corporate earnings, analysts have said. But if Covid-19 cases reach a tipping point, analysts say they will have to revise their forecasts.