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The S&P 500 posted its worst daily decline since late September but didn’t entirely erode October gains.

Stocks faltered at the beginning of the week as COVID-19 cases surged and stimulus talks stalled. Uncertainty surrounding the 2020 election also drove market declines.

The S&P 500 (-1.9%), Dow Jones Industrial Average (-2.3%) and NASDAQ (-1.6%) each sharply declined today. More specifically, the S&P 500 closed below its 50-day moving average for the first time in three weeks. While moves like this are uncomfortable and never easy to digest, it is important to put the decline in perspective, cautioned Chief Investment Officer Larry Adam. For the S&P 500, it was the worst daily decline since September 23 (basically one month ago). Even with the decline, the broad-market domestic index remains up ~1% for the month of October. This week, the market will receive economic data points that show the strongest quarter of economic growth in history (estimated at 25% to 30%) and the busiest week in earnings reports should highlight the resiliency of corporate America overall as earnings continue to improve and come in well above estimates.

A third wave of coronavirus cases in the U.S. spiked to 83,000, the highest ever single-day count, on October 23, coming close to that mark again the very next day, explained Healthcare Policy Analyst Chris Meekins. The average daily cases, week over week, continue to climb, as do hospitalizations and, sadly, fatalities, although the rate itself is lower than at the beginning of the pandemic.

“It is crucial for Americans to maintain vigilant mitigation measures; the virus’s spread is heading in an extremely concerning direction that could prove catastrophic for our country’s healthcare system and economy,” Meekins said. White House Chief of Staff Mark Meadows announced on Sunday that we will not be able to control the pandemic and should instead focus on vaccines and therapeutics.

Although unemployment rates remain high, consumers seem to have adjusted, returning to more familiar spending patterns as we await news of further fiscal stimulus. Talks have been in the works for some time. While there’s still hope that a bipartisan deal can be reached, policy differences remain the largest hurdle. Washington insiders seem to anticipate a post-election package in line with the government funding deadline on Dec. 11 or the year-end expiration of the Federal Pandemic Unemployment Compensation program, explained Ed Mills, Washington policy analyst.

Large swaths of the country have been contending with natural disasters, from multiple hurricanes to widespread wildfires. All of this, in addition to the upcoming Election Day, creates headwinds for the economy and the domestic equity markets in what has proven to be an already volatile year. More volatility is expected in the days to come, no matter which party takes control of Congress and the White House. If you’re concerned that the markets will dive or thrive based solely on who is in the Oval Office, historic trends show that anxiety has been unfounded in the past. Future growth is anticipated no matter what happens in D.C., but it may take some time.

Past performance may not be indicative of future results. Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of the Raymond James Chief Investment Office and are subject to change. Economic and market conditions are subject to change. The S&P 500 is an unmanaged index of 500 widely held stocks. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The performance mentioned does not include fees which would reduce an investor’s performance. An investment cannot be made in these indexes.