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NEW YORK (AP) – Wall Street took a nosedive at the end of Tuesday’s session, reversing solid gains to close deep into negative territory after President Donald Trump announced he would suspend talks on coronavirus relief legislation until later. of the November 3 elections.
The three main US stock indices closed more than 1% lower.
“Markets finally ran out of hope that President (Nancy) Pelosi and (Treasury) Secretary (Steven) Mnuchin would pull a rabbit out of a hat,” said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance in Charlotte, Carolina. from North.
Trump’s announcement in a tweet came on the heels of US Federal Reserve Chairman Jerome Powell’s warning about the dire economic repercussions if Congress did not pass additional fiscal stimulus.
“Powell asked Congress to act quickly and Trump effectively pulled the rug out from under that,” said Oliver Pursche, president of Bronson Meadows Capital Management in Fairfield, Connecticut. “It’s troubling given President Powell’s remarks today.”
In statements delivered online to the National Association for Business Economics, Powell warned that the US economy could spiral downward if the coronavirus is not contained and Congress does not provide additional fiscal support to businesses and households.
The Dow Jones Industrial Average fell 375.88 points, or 1.34%, to 27,772.76, the S&P 500 lost 47.68 points, or 1.40%, to 3,360.95, and the Nasdaq Composite fell 177.88 points, or 1.57%, to 11,154.60.
The pan-European STOXX 600 index was up 0.07% and the MSCI global equity index lost 0.75%.
Crude prices boosted earnings, fueled by supply disruptions from looming storms in the Gulf of Mexico and an ongoing oil workers’ strike in Norway.
US crude futures closed at $ 40.67 per barrel, a 3.7% gain, while Brent gained 3.29% on the day to settle $ 42.65 per barrel.
The dollar, essentially flat for much of the session, jumped against a basket of world currencies after Trump’s tweet.
The dollar index was up 0.21%, and the euro was down 0.27% at $ 1.1749.
The Japanese yen strengthened 0.14% against the dollar at 105.62 per dollar, while the British pound last traded at $ 1.2902, down 0.58% on the day.
Yields on US Treasuries fell from four-month highs after Trump’s announcement.
Benchmark 10-year notes last rose 5/32 in price to yield 0.7469%, from 0.762% late Monday.
The 30-year bond last rose 13/32 in price to yield 1.5501%, from 1.567% on Monday.
Gold prices fell after the safe-haven precious metal erased previous gains.
Spot gold fell 1.4% to $ 1,886.71 an ounce.
– Reuters
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