The steep drop in the stock market Thursday, which led to a 1 percent decline on the Standard & Poor’s 500 index, might have seemed surprising given that the Treasury market had been relatively calm throughout the partial government shutdown. The three biggest moving parts of the U.S. stock market all continue to be the health of corporate earnings, the policies of the Federal Reserve, and the outlook for interest rates. And the stocks of the major financial firms, such as Morgan Stanley and Goldman Sachs, have performed fairly well as the government’s actions since the November presidential election have been determined by Republicans. As of the close of trading on Thursday, the market was on track to be up more than 2 percent this year.
Other market players were raising questions about the effect of Biden’s decision to join the 2020 Democratic race. “If Biden is in, it will have an impact, but it is too early to tell how much,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services. “Biden may give some investors pause to consider the election a few months from now, and then decide whether to get involved.”