A Month In Brief
The Dow Jones Industrial Average gained 1.69%, while the Standard & Poor’s 500 Index tacked on 1.84%. The Nasdaq Composite, already up 6.75% in May, rose another 5.99%.1
Stocks opened the month higher, but the momentum quickly stalled, as states struggled to re-open their economies while facing an increase in COVID-19 cases. Investor sentiment was further dampened by a subdued forecast of economic recovery issued by the Federal Reserve.
But the market turned and rallied on a series of upbeat news announcements. First, by the Fed, which said that it would extend its bond-buying program to include the debt of individual companies. Second, a strong retail sales report buoyed spirits. And finally, the news of an effective COVID-19 treatment for critically ill patients strengthened investor sentiment.
Bump Up in COVID-19
Market direction reversed late in the month, due to an increase in COVID-19 cases in Florida, Texas, and California, which prompted some states to roll back their re-opening plans.
However, stocks still closed out the month strong, posting back-to-back gains to cement a solid showing.
What Investors May Be Talking About in July
Assessing the economy has become increasingly difficult due to the uncertainties caused by the pandemic.
For example, May’s employment report from the Bureau of Labor Statistics showed that the economy added 2.5 million new jobs. Wall Street economists were stunned by the news, having forecast a drop of 8.3 million.3
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1. The Wall Street Journal, June 30, 2020
3. The WashingtonPost.com, June 5, 2020