Before The Bell - It continues to be a topsy-turvy stock market this year. And the volatility, already on the rise, appears to be increasing even more. On point, on Monday, optimism about a possible fiscal stimulus deal had excited the bulls sufficiently to push the stock market ahead strongly. Indeed such optimism, along with indications that the President was making a quick recovery from COVID-19, helped the Dow Jones Industrial Average to gain 465 points.

Then, on Tuesday, the market, in a carryover from the previous session, continued on an upward path until late in the trading session, when the President, upset by the size and scope of the suggested fiscal stimulus proposal put forth in the House by the Democrats, announced that he wanted no part of any deal until after the election. The market, upset in its own right, then sold off abruptly, with a better than 200 point Dow advance turning into a closing loss of 375 points.   

Then, later Tuesday evening, the President shifted gears and indicated that he would be willing to sign off on small agreements within some industries, such as the airlines. The futures immediately rallied and this strength persisted throughout yesterday's trading session. Importantly, unlike the previous day, there was no late disappointment. As such, the stock market would rally into the close, with the Dow and the NASDAQ adding 530 points and 210 points, respectively.

So, as we look ahead to the penultimate session of the week, here is where we are. Wall Street ended higher yesterday on hopes that a partial stimulus deal might yet emerge in contentious Washington. In essence, rather than a comprehensive stimulus package, we possibly are looking at a series of smaller, stand-alone bills that would be highlighted by a bailout of the troubled airline industry. Stocks in that sector, not surprisingly, were among the leaders in the latest session.

Meanwhile, in other news yesterday, the indexes held their gains after the Federal Reserve released the minutes from its last FOMC meeting. At the time, the central bank agreed to a somewhat newer approach to monetary policy. Essentially, though, it was a case of continued monetary support for a fragile business upturn. 

As to individual stocks, shares of drug maker Eli Lilly (LLY) rose nicely on news of a new COVID-19 antibody treatment.

Looking out to a new day, the stock market will likely be influenced by any developments on the fiscal stimulus front and on the Fed's minutes from yesterday, which emphasized the FOMC's concern about the ongoing pandemic and its impact on the economy. Finally, in developments yesterday, data showed that mortgage applications had risen last week, reversing a previous week dip. Adding it all up, it would seem that the stock market will open on a positive note this morning.  – Harvey S. Katz, CFA

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.