At midmorning, the Dow Jones industrial average had fallen about 800 points, or 2.9 percent. The Standard & Poor’s 500 index gave up more than 75 points, or 2.3 percent, while the tech-heavy Nasdaq composite shed almost 200 points, or 1.8 percent.
Monday marked the start of another volatile trading week. So far, Wall Street has recorded three consecutive weeks of losses, highlighting September’s historically poor performance and the unique risks and disruptions facing investors just weeks before the presidential election. The market retreat this month largely has been fueled by an ongoing tech sell-off and mixed messaging from drugmakers about the timeline for the availability of vaccines and treatments for the novel coronavirus.
Markets seemed dejected that a vaccine will likely not be available to most of the American public until sometime in the middle of next year, said Kristina Hooper, chief global market strategist at Invesco. But investors are looking ahead to that timeline alongside the contentious political environment and concerning health updates from other nations. “Given that election season has gone into high gear and covid-19 infections are rising in a number of countries around the world, we should all be fastening our seat belts as volatility is likely to increase from here,” she said.
Michael Farr, president of Farr, Miller & Washington also pointed to an array of factors fueling the sell-off. A resurgence of cases in Europe has pushed the United Kingdom to consider another shutdown, triggering a drop in airlines, cruise lines, and hotel chains, he said. And the political battle over the next Supreme Court Justice “kills the chances of passing an additional stimulus bill prior to the November election,” he said.
The tech giants that were previously fueling the astonishing comeback on Wall Street continue to fall lower, as selling pressure intensifies, dragging the market down. Farr also noted the losses of the financial sector, prompted by the new accusations of large-scale money laundering. “Any of these presents a strong head wind to share prices but taken together, they are inflicting more broad damage,” he said.