U.S. stock futures were flat in overnight trading, as investors braced for the start of the fourth quarter with hopes of fiscal stimulus.
Dow futures fell 30 points. S&P 500 futures and Nasdaq 100 futures dropped 0.18% and 0.12%, respectively.
The House of Representatives delayed the vote on a $2.2 trillion rescue package on Wednesday evening after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to strike a coronavirus aid deal; however, the pair said the conversation would continue.
The Federal Reserve said Wednesday it is extending the restrictions on big bank dividends and buybacks through the fourth quarter. Banks dipped in extended trading following the central bank’s announcement.
On Wednesday, the Dow Jones Industrial Average climbed more than 300 points, after being up more than 550 points on hopes the White House and Senate would agree to a second stimulus package.
The S&P 500 also registered a gain, climbing more than 0.8%. The Nasdaq Composite rose 0.75%, helped by gains in Netflix and Microsoft.
Stocks that hinge on economic recovery — like airlines and cruise lines — lost steam following the negative stimulus headlines. Airlines are on the cusp of laying off tens of thousands of employees without further government support.
“Given lawmakers failure to make any progress, there is further doubt that any agreement can be reached prior to the election on November thirds,” Aviva Investors’ head of U.S. equities Susan Schmidt told CNBC. “Investors are entering into the final quarter of the year expecting continued volatility and recognizing that not-owning the winners this year has had a detrimental impact on their portfolios.”
Despite Wednesday’s rally, stocks rounded out September with losses, the first month of decline since March.
The Dow Jones Industrial Average lost nearly 2.3% in September, a typically weak month for equities. The S&P 500 fell 3.9% this month. The technology heavy Nasdaq Composite dropped 5.2% since September 1