Just as the S&P and Nasdaq were mounting a comeback Tuesday afternoon, a tweet from the president sent stocks tumbling.
Investors, who had been counting on more fiscal stimulus to support the market, dumped stocks after President Donald Trump called off talks with Democratic lawmakers on a coronavirus relief bill.
Earlier Tuesday, Federal Reserve Chair Jerome Powell warned that the U.S. economic recovery could still slip into a downward spiral if the coronavirus isn’t contained and Congress fails to deliver additional fiscal support.
DataTrek Research co-founder Nick Colas:
“Powell is absolutely right. The country needs more stimulus and needs it now. Unemployment’s still too high.”
The Dow and S&P 500 fell around 1-and-a-third percent. The Nasdaq fell roughly 1-and-a-half percent.
Boeing was the Dow’s biggest decliner. The aerospace giant slashed its 20-year forecast for airplane demand due to fallout from the pandemic.
One stock benefiting from the health crisis is BioNTech. European regulators have started a review of the coronavirus vaccine the German biotech firm is developing with Pfizer.
Shares of audio device makers Sonos and Logitech fell sharply. Apple removed their speakers from its online stores.