Fri, July 19, 2024

Wall Street could Rebound amid Stop-Gap Funding Approval

Wall Street could Rebound amid Stop-Gap Funding Approval

Wall Street stocks fell on Thursday amid the heightened Russia-Ukraine tension but expected to rebound higher due to stop-gap funding approval.

The Nasdaq Composite index led the losses by 2.88% to 13,716.72 points.

Its top losers were Amplitude and Guardian Health Services.

Each company lost 58.90% to $17.10 per share and 34.12% to $0.37 per share, respectively.

The benchmark S&P 500 index followed by losing 2.12% to 4,380.26 points, its largest daily percentage drop in two weeks.

Its worst performers were Albemarle and LKQ, which lost 19.91% to $197.02 per share and 14.32% to $47.64 per share, respectively.

Furthermore, the Dow Jones Industrial Average dropped 1.78% to 34,312.03 points.

Salesforce.com led its declines by 5.53% to $200.03 per share.

Also, Caterpillar Inc. tumbled 4.37% to $194.74 per share.

The decline of major US indices is mostly driven by the heightened tension between Russia and Ukraine.

Moscow expelled a US top diplomat at the peak of the ongoing geopolitical crisis on Thursday.

NATO allies, including the United States, accused the federation of misleading the world for misinformation.

Earlier this week, President Vladimir Putin announced that his government is willing to settle the dispute for diplomatic solutions.

It was followed by an announcement that Russia withdrew some of its troops from the Ukrainian border.

However, it added 7,000 more troops to its base near Ukraine, according to US officials.

Due to this ongoing crisis, investors shifted towards safe havens such as gold and bonds.

If negative news from Russia and Ukraine continues for the upcoming days, resulting in a war or invasion, the stock market would crash.

Hence, federal officials jitter on a possible government shutdown.

 

Stop-gap Funding Bill Approval

To avoid a shutdown, the US Congress approved the legislation to fund the state through March 11.

Also, the Senate acted before the deadline loom on Friday, when existing funds would expire for operating most of the federal government.

The temporary funding bill was passed in a bipartisan vote of 65-27.

Now, it is up to President Joe Biden to sign it as a law.

This third stop-gap measure would give Congress until March to reach a deal on a spending bill.

It would then keep Washington buzzing through September 30, the end of the fiscal year.

Moreover, the negotiation between the House and Senate would appropriate around $1.50 trillion in discretionary funds for a range of government programs.

This includes those administered by the Pentagon, the Environmental Protection Agency, State Department, and other Cabinet-level divisions.

It could provide a positive sentiment to investors and help the indices regain their losses.

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