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Investing.com – The Dow turned negative on Tuesday as President Donald Trump rejected U.S. House Speaker Pelosi’s $2.4 trillion stimulus proposal, instructing his representatives to halt talks until after the election.
The Dow Jones Industrial Average fell 1%, or 280 points. The S&P 500 was down 1%, while the Nasdaq Composite fell 1.13%.
Trump accused the Pelosi of “not negotiating in good faith” and said her stimulus proposal was “in no way related to Covid-19.”
The move dealt a blow to hopes of further stimulus, which Federal Reserve chairman Jerome Powell said was needed to ensure a robust recovery.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said in a speech at a virtual annual meeting held by the National Association for Business Economics. “Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth.”
Value stocks — those linked to the strength of the economy like financials, industrials, and materials — fell into the red, dragging the broader market down.
