Dow falls 400 points after Trump calls off negotiations on stimulus package

Wall Street fell on Tuesday after President Donald Trump said he would be halting all negotiations on a new round of coronavirus stimulus relief.

The Dow Jones Industrial Average fell by almost 400 points, having been up more than 200 points earlier in the day. The S&P 500 and Nasdaq were down by around 1.5 percent each.

“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump tweeted on Tuesday afternoon.

Stocks have surged since Trump’s Monday announcement that he would be leaving hospital after treatment for Covid-19, but investors remain firmly focused on additional fiscal relief.

Speaking at a virtual economic forum on Tuesday morning, Federal Reserve Chairman Jerome Powell again stressed the need for fiscal aid, as millions of Americans remain out of work and face potential eviction if they do not receive further government assistance.

“The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” Powell said as part of his keynote speech to the National Association for Business Economics.

While he acknowledged progress in some areas of job creation, he said the nation’s economic recovery still had “a long way to go.”

Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, D-Calif., have so far failed to reach any compromise after weeks of debating the finer points of the new stimulus deal.

Trump joined Mnuchin, Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy on a Tuesday phone call to discuss coronavirus relief, after which Trump said Pelosi was “not negotiating in good faith.”

In response to Trump’s demand for his team to call off stimulus negotiations, Pelosi said Tuesday the president was “putting himself first at the expense of the country.”