U.S. stocks looked set to rebound on Wednesday as investors shook off weak data from a day ago and focused on signs of easing tensions in Hong Kong and the retrenchment of a host of other anxiety-inducing political problems.
At session lows, the Dow had fallen 425.06 points, or 1.6%, the S&P 500 was down 34.61 points, or 1.2%, while the Nasdaq shed as many as 115.56 points, or 1.5%.What drove the market? Upbeat news from Hong Kong has set the tone for buying after Chief Executive Carrie Lam said she would withdraw a China extradition bill that sparked months of protests in the region and raised worries that those conflicts could eventually hurt the business environment and global financial markets.
Meanwhile, the U.K. Parliament late Tuesday took steps toward preventing a no-deal exit from the European Union. Newly inaugurated Prime Minister Boris Johnson suffered a major defeat as lawmakers voted to seize control of the Brexit agenda, prompting him to threaten to call for snap elections. “This renewed confidence has quickly spread to the rest of the world, especially Europe, where investor sentiment had already been boosted by political events in the UK. British PM Boris Johnson lost his parliamentary majority and the chamber voted a law to prevent a no deal Brexit,” he said.
Investors have been wrestling with concerns that the domestic economy might slip into recession amid the U.S. and China tariff conflict, which has disrupted supply chains and helped to slowdown global economies. Investors will be watching for clues as to the Fed’s next move on interest rates, which will be decided at an upcoming meeting planned for Sept. 17-18.