US Stock Market Overview – Stocks Drop and Volatility Climbs as Oil Continues to Fall

 

US stocks traded on the defensive on Tuesday, as investors took profits after a robust bear market rally. All sectors in the S&P 500 index were lower on Tuesday driven down by Technology shares. Energy was the best performing sector in the s&p 500. Crude oil prices continued to trade under pressure, with the June contracts tumbling 33% to 13.5. The crude oil market continues to experience volatility, after the May contract tumble to -$37 per barrel on Monday. All the major averages moved lower

Volatility Remains Buoyed

Volatility remains elevated. The VIX volatility index rallied back above 45%, which is elevated but well off the highs seen in March near 85%. The dollar climbed on Tuesday as US yields edged slightly higher despite a decline in stocks.

New Aid Deal is Consummated

Congress and the White House hammered out a deal for $480 billion in aid to small businesses and hospitals, the federal government’s latest effort to blunt the economic and health-care crisis caused by the coronavirus pandemic. The top Democrats reached a deal with Treasury Secretary Steven Mnuchin to add $310 billion to the Paycheck Protection Program, a small-business loan program that ran out of funding last week after being deluged with applications. A separate program, the Economic Injury Disaster Loan fund, aimed at quickly delivering a mix of grants and loans, will get $60 billion in the legislation. The agreement will also include $75 billion in assistance for hospitals and $25 billion to expand testing for the virus across the country, according to aides.

Trump Flinches in Halt of Immigration

President Trump is expected to announce a pause in the issuance of most green cards but backed off plans to also halt guest worker programs. This would immediately create a problem with the farming industry which relies on immigrates for harvest.