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TOPLINE
The market opened slightly higher on Tuesday but later turned negative as Wall Street continues to assess the risks of reopening the economy, with some states lifting coronavirus lockdown orders.
Investors continue to assess the risks of the U.S. returning to business.
Johannes Eisele/AFP via Getty Images
KEY FACTS
The Dow Jones Industrial Average is down 0.4%, nearly 100 points lower, on Tuesday, while the S&P 500 lost 0.5% and the Nasdaq traded flat.
Stocks opened 0.5% higher, before giving up gains and turning negative by the afternoon.
The major averages fell after Republican Senator Lindsey Graham pushed legislation to demand China either cooperate with an investigation into the origins of coronavirus or face sanctions.
Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, warned a Senate committee on Tuesday that the U.S. does not yet have the coronavirus outbreak “completely under control” and that the national death toll is “likely higher” than current levels.
U.S. consumer prices in April—the latest slew of sobering economic data, showed a drop of 0.8% last month, the most since 2008, according to the Labor Department.
The CBOE Volatility Index (VIX), Wall Street’s fear gauge, has come way down since the market’s wild months in March and April, however: After peaking at 82.7 in late March—amid the height of the coronavirus selloff—it’s now down to 26.4.
Key background
Stocks have been rising in recent weeks, despite coronavirus headwinds, as Wall Street becomes more optimistic about a reopening of the economy and some states allow businesses to reopen.
Crucial quote
“It’s certainly encouraging that business conditions appeared to have troughed in early April,” says Adam Crisafulli, founder of Vital Knowledge. But the declines compared to last year “remain enormous, and it will be some time before trends return to precrisis levels.”
What to watch for
“It’s been a rough year for the banks,” according to Bespoke Investment Group. “Despite coming into this crisis much better capitalized than they were during the last, the sector still hasn’t been able to avoid the pain.” Banks are down about 40% so far in 2020, which is worse than any other industry group in the S&P 500, the firm’s data shows.
Tangent
Boeing CEO Dave Calhoun said in an interview with NBC on Tuesday that he doesn’t expect air travel to return to normal in 2020 and warned that a major airline might go out of business later this year.
Further reading
Why A Private Equity Firm Backed By Bernard Arnault Is Putting $400 Million Into Norwegian Cruise Line
NCLH
(Forbes)
Stocks Rally, Dow Rises Over 400 Points Despite Record Job Losses (Forbes)
Stocks Had Their Best Month In 33 Years, But Here’s Why Experts Are Skeptical (Forbes)
The U.S. Economy Will Beat Coronavirus, Buffett Says: ‘Never Bet Against America’ (Forbes)
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