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 rose 45 points. S&P 500 futures and Nasdaq 100 futures ticked up 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, dragged down by weakness is technology stocks. However, all three of the major averages achieved strong gains for the third quarter. 

Investors also digested a combative presidential debate between Donald Trump and Joe Biden on Tuesday evening. 

Starwood’s Barry Sternlicht said Wednesday the stock market would suffer from a Democratic sweep.

“Maybe long term, two, three years out the Democratic sweep would be OK but short term, with the change in capital gains taxes, I think you’d see a pretty significant correction in high flying stocks in November, whenever they announce the winner,” the Starwood Capital Group chairman and CEO said at the Delivering Alpha conference presented by CNBC and Institutional Investor.

Conversely, Social Capital Founder and CEO Chamath Palihapitiya said the stock market will continue to move higher regardless of a Trump or Biden presidency. The outspoken technology investor said that with rates near zero, investors will need to find growth in the equity market. 

Positive coroanvirus vaccine news also bolstered equities on Wednesday. Regeneron’s treatment improves symtoms in non-hospitalized patients and Moderna’s vaccine shows signs of working in older adults, according to a study. Financial Times reported Wednesday that Moderna’s vaccine won’t be ready before the November election.

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