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Stock Rally Fizzles, Futures Fade Ahead Of First Presidential Debate

If yesterday’s scorching rally was ascribed to optimism over covid vaccines and a fiscal stimulus deal, then today’s subdued action can best be described as covid pessimism amid a rising number of pandemic deaths and a cloudy outlook on U.S. fiscal stimulus. Sure enough, a rally in S&P futures fizzled overnight with Eminis trading flat as European shares slipped on Tuesday ahead of a pivotal U.S. presidential debate while waiting for signs of progress on a fiscal stimulus package in Washington and the latest consumer confidence reading. The dollar dipped and Treasurys were unchanged for yet another day.

US shares were set to open a touch lower, with futures for the S&P 500 and Nasdaq giving up earlier gains to slip into negative territory. Hard-hit sectors like hotels, banks and airlines had made strong gains on Monday, as the market’s back-and-forth action continues. Sorrento Therapeutics rose 8% in premarket trading after the drugmaker said both of its COVID-19 antibody candidates showed potent neutralizing activities against the novel coronavirus in a study in Syrian golden hamsters. Tesla fell 3.1% in premarket trading after three consecutive days of gains. Tesla secured its own lithium mining rights in Nevada after dropping a plan to buy a company there, according to people familiar with the matter

A flurry of underwhelming macro-economic data which have hammered the Citi US econ surprise index, increase in virus cases and uncertainty related to the presidential election have weighed on markets, putting all three main indexes on track for their worst monthly performance since March.

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