S&P 500 Futures ignore Tuesday’s recovery moves, hopes of US stimulus amid virus woes

• S&P 500 Futures drop 0.20%, down for the fifth day in previous five.
• US Congress agrees to the stopgap funding bill, indicates a break of stimulus deadlock.
• New cluster of COVID-19 in Brooklyn joins virus-led pessimism in the UK and Europe.
• Central bankers are dovish, preliminary PMIs in the spotlight.

S&P 500 Futures decline to 3,293, down 0.20% intraday during the initial hour of Wednesday’s Tokyo open. In doing so, the risk barometer pays a little heed to the news suggesting the continuation of the US government work while also ignoring Tuesday’s welcome performance of Wall Street.

American Congress recently agreed to the bipartisan stop-gap funding bill to avert the government shutdown by the end of the current month. The move indicates receding differences between the ruling Republicans and the opposition Democratic party, which in turn can help tackle the halt over the coronavirus (COVID-19) aid package.

While the hopes of stimulus could be positive for the market sentiment, the latest found COVID-19 cluster in Brooklyn defies the recently soft virus figures from America. The same puts the world’s largest economy again in the line of Europe and the UK, not to forget India and Brazil, as far as the pandemic is concerned. As a result, challenges to the global economic recovery strengthen and weigh on the risk-tone sentiment.

On Tuesday, Wall Street managed to cheer upbeat US data and pullback in technology shares. Though, the US dollar index (DXY) stood firm as the market leader while probing the late-July tops.

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Looking forward, market players will keep eyes on the preliminary readings of September month PMI data from the UK, Europe and the US for fresh impetus. While most data are likely to portray the latest virus resurgence, scheduled comments from the policymakers of the BOJ and the Fed can offer additional directives for the trade decisions.

It should, however, be noted that further strengthening of the deadly disease, in absence of the vaccine, can keep the equities pressured. Also, US political play ahead of the November month’s Presidential Election may as well challenge the market bulls.