The energy sector has helped support Wall Street and the debt ceiling extension has only served to further shore up the markets. While the Republicans are not too happy about their President taking the side of political rivals, the Democrats, to pass a three-month debt ceiling rise move, the news had calmed down anxieties in the market. If the debt ceiling regions had not taken place, there was an imminent risk of the government being shut down due to lack of funds. With this possibility averted, at least for the short term, the share market has seen some relief that has related to a strengthening of prices.
The energy sector has played a key role in helping the markets stay afloat by registering the biggest single-day improvement over a period of two months. This became possible mainly because of an increase in oil prices.
Stocks improve from previous day sell-offs
The ongoing North Korea crisis and many other factors had prompted a sell off the previous day but the energy sector stocks and the debt ceiling decision served to negate the effect and prop up prices here. Meanwhile, the services sector activity also posted some good improvements in August and this too served to shore up the stock market. An increase in employment as well as in new orders has indicated that things are strengthening here. In conjunction with this, data also shows that trade deficit has only moderately risen in July, another heartening piece of news. Overall, it is clear the economy has not just stabilized but is also gathering momentum now.
Modest pace of expansion until mid-August
A survey by the Federal Reserve has confirmed this by indicating that the American economy has expanded modestly during the July to mid-August period. Experts say that the stock market cannot be expected to show any dramatic improvements because of the many factors that are playing out in the global political scene. In main is the ongoing concern about North Korea's missile tests and threats to U.S. territories and allies. Unless this situation is diffused, the impact of it in keeping the stock prices subdued will continue.
However, what is heartening is that, while Tuesday recorded a dip in prices, benchmark S&P 500 almost touched its record high right before closure for the day. Experts feel that the investors are quite resilient and that once the news of impacting factors sinks in, they will regain confidence and resume investing, leading to support for stock prices.