Weekly jobless claims rise, Dow slumps more than 200 points, S&P 500 trades in correction territory.
Stocks were under pressure on Thursday, as investors waded through a morass of issues, including gridlock on Capitol Hill, which has sapped prospects for another spending bill. Market participants have long feared that a lack of fresh stimulus would derail an economic rebound.
Weekly jobless Claims Rise
The weekly report in claims highlights that job creation in the aftermath of the pandemic is stalling out, raising further fears about the shape of the U.S.’s return to normalcy.
Jobless claims rose 4,000 to 870,000, the Labor Department said Thursday, reflecting that slightly more Americans applied for state unemployment benefits in the week ended Sept. 19 than in the prior week. Economists surveyed by MarketWatch had been looking claims to decline to 850,000. Claims in the prior week were raised 6,000 to 866,000.
Remarks by Federal Reserve Chairman Jerome Powell in congressional testimony this week, as well as comments by other Fed policy makers, have also signaled that the central bank is taking a wait-and-see approach when it comes to further monetary stimulus, while signaling the need for Congress to act on fiscal stimulus.
On top of that, fears of a contested presidential election on Nov. 3 were also seen weighing on sentiment, analysts said. President Donald Trump on Wednesday refused to commit to a peaceful transition of power following the election, telling reporters “we’ll have to see what happens…I’ve been complaining very strongly about the ballots. And the ballots are a disaster.” Trump was referring to mail-in ballots, which he has asserted, without evidence, are prone to widespread fraud as weekly jobless claims rise.
