Stocks took a header late in Tuesday’s session as it appeared a stimulus package wasn’t going to happen before the election.
Basically, President Trump called it off. A day after returning home from the hospital for treatment of covid, he directed Republicans to stop negotiations on a stimulus deal until after the election.
The market wasn’t really confident that Speaker Pelosi and Treasury Secretary Mnuchin would suddenly have a breakthrough and reach a deal. But it was hopeful! As long as they were talking, it seemed possible.
The good news is that the election is less than a month away, and a stimulus measure will be a major issue for whoever wins.
The American people have been hanging on for weeks now since the original aid expired, so let’s hope they can keep treading water a little while longer.
Just a few hours before the President’s tweet, Fed Chair Jerome Powell was mentioning the need for more help out of Capitol Hill during virtual comments at the National Association for Business Economics. He said the risk of overdoing a stimulus is smaller than doing too little.
The major indices looked like they might finish in the green again on Tuesday, but the late pullback sent them all lower by well over 1%.
The NASDAQ dropped 1.57% (or about 177 points) to 11,154.60. Meanwhile, the S&P dipped 1.4% to 3360.97, while the Dow was off 1.34% (or around 375 points) to 27,772.76.
The major indices had a strong beginning to the week on Monday as the President returned to the White House after a precautionary weekend stay at Walter Reed for his covid infection.
The NASDAQ jumped more than 2.3% yesterday, while the Dow and S&P each rose over 1.5%.