Stocks ended sharply lower Tuesday after President Donald Trump told his team to halt negotiations with Democrats on a fiscal stimulus package.
“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 said in a tweet.
The Dow Jones Industrial Average finished down 375 points, or 1.34%, to 27,772, the S&P 500 fell 1.4% and the Nasdaq sank 1.57%.
At one point Tuesday, the Dow was up as much as 0.7%.
"Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19," Trump said in a tweet. "We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith."
Treasury Secretary Steven Mnuchin and House Speaker Pelosi have been negotiating but significant gaps between their respective proposals remain.
Pelosi said in a statement that Trump “showed his true colors: putting himself first at the expense of the country, with the full complicity of the GOP Members of Congress.”
She added that “walking away from coronavirus talks demonstrates that President Trump is unwilling to crush the virus.”
Pelosi earlier told her Democratic colleagues that she and Mnuchin disagreed on assistance to state and local authorities, spending to address the coronavirus and getting aid to ordinary Americans, Bloomberg reported.
Democrats had recently pushed a $2.2 trillion package, while the White House had endorsed $1.6 trillion.
Federal Reserve Chairman Jerome Powell, meanwhile, earlier Tuesday said the U.S. recovery would be weak without additional fiscal support from the government.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said in a virtual speech hosted by the National Association for Business Economics.
“By contrast, the risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste.”
The Federal Reserve has stressed the need for the U.S. to contain the spread of the coronavirus and emphasized further fiscal stimulus from the U.S. government to aid in the recovery.
“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.
The Fed chairman added that the broadest measure of U.S. unemployment sits at around 11%, following the loss of about 22 million jobs since the pandemic began in early March, and reiterated the current outlook remains "highly uncertain."