The Dow Jones Industrial dipped almost 3% on Monday, and the S&P 500 slid more than 2% from the previous week, off about 7% from its recent highs earlier this month.
Investors have had a lot to process over the past few days: domestic equity declines on top of global ones, the loss of legendary Supreme Court Associate Justice Ruth Bader Ginsburg and a rise in COVID-19 cases across the nation. The Dow Jones Industrial dipped almost 3% on Monday, and the S&P 500 slid more than 2% from the previous week, off about 7% from its recent highs earlier this month. Large-cap tech names, which had experienced a run up in recent months, began to drag on the broader markets this week, while the rest of the stocks generally held their ground.
September has historically been a weak month for equities. Chief Investment Officer Larry Adam has repeatedly cautioned that this seasonal slump combined with expected election volatility and valuations at their highest level in almost two decades could make the equity markets vulnerable to the modest pullback we’re seeing now.
Progress on the pandemic has been a mixed bag of late, one step forward, two steps back. The daily average number of cases jumped 17% within a week, according to Healthcare Analyst Chris Meekins, although the seven-day average continues to hover around 5%. Labor Day gatherings, schools reopening and relaxed mitigation measures likely all contribute to the uptick, he believes.
The passing of Justice Ginsburg leaves an opening on the Supreme Court late in an already-contentious presidential election cycle – potentially ushering in a partisan political battle, as well as a shift in the electoral landscape, according to Ed Mills, Washington policy analyst.