US Stock Market Overview – Stock Rally Led by Energy; the VIX continues to Fall

US stocks moved higher on Tuesday, driven by value shares as growth stocks took a small breather. Most sectors in the S&P 500 index were higher, led by energy and materials, Communications were the worst-performing sector. The VIX volatility index, which measures the “at the money” strike prices on the S&P 500 index fell below 28 for the first time since mid-February. This is nearly 80% higher than the average for the VIX during 2019.

The Atlanta Fed GDPNow forecast now shows that Q2 GDP is forecast to decline by 52.8%. The White House is focusing on a relief package that would encourage people to go back to work. Apple’s mobility is showing that traffic in the United States is accelerating. There appears to be a lot of pent up demand that could accelerate economic growth once restrictions are lifted.

The White House Wants a Customized Stimulus Bill

The White House team has assembled a set of stimulus proposals meant to encourage the public to return to work and resume normal life, including going out to restaurants and taking vacations, geared jump-start the ailing economy as quickly as possible. The goal is to show that growth is returning to normal and that the President is the person to lead the economy back.

Q2 GDP is Expected to Tumble

The Atlanta Fed GDPNow outlook is now showing a 52.8% in growth. That follows data from the Institute for Supply Manufacturing showed just 43.1% of firms seeing an expansion in May. The Atlanta Fed anticipates personal consumption expenditures, which make up 68% of the nation’s gross domestic product, to fall 58.1% in the Q2.

Gross private domestic investment, which accounts for 17% of GDP, is now projected to slide 62.6%. The New York Fed’s GDP Nowcast, estimates a 35.5% Q2 drop, while CNBC’s Rapid Update survey of leading economists has a median 38% decline.

For a look at all of today’s economic events, check out our economic calendar.