- US stocks extended losses into Monday’s close as a lack of stimulus progress cut into hopes for a pre-election deal.
- House Speaker Nancy Pelosi expedited talks on Sunday, setting a 48-hour deadline for the White House and Democrats to ink a deal. She later told Democrats that significant obstacles in reaching a compromise remain.
- Even if an agreement is reached, the bill is set to die in the Senate as Republicans push a $US500 billion measure.
- The US notched its fifth-straight day of more than 50,000 new cases, reviving fears of new lockdowns and a hit to economic recovery.
- Watch major indexes update live here.
US equities tumbled on Monday as fading stimulus hopes slammed investor sentiments.
House Speaker Nancy Pelosi established a 48-hour deadline on Sunday for the White House and Democrats to reach a compromise on fresh fiscal relief. She and Treasury Secretary Steven Mnuchin held multiple talks over the weekend on a deal.
While the White House hasn’t yet officially upped its $US1.8 trillion counteroffer to Pelosi’s $US2.2 trillion proposal, President Donald Trump repeated calls for a deal larger than the two options.
Stocks extended their slide in the afternoon after Pelosi told Democrats that significant disagreements between the party and the White House remain. With a single day left for the two to reach a deal, optimism for pre-election stimulus is all but dead.
Here’s where US indexes stood at the 4 p.m. ET market close on Monday:
- S&P 500:3,426.92, down 1.6%
- Dow Jones industrial average: 28,195.42, down 1.4% (411 points)
- Nasdaq composite:11,478.88, down 1.7%
Even if a deal is reached ahead of the Tuesday deadline, Senate Republicans are set to kill the package. Senate Majority Leader Mitch McConnell plans to bring a $US500 billion measure to a vote on Tuesday and continues to oppose any larger measure. Democrats are set to block the piecemeal bill, essentially leaving both parties stuck in attempts to pass their own packages.
“It seems politicians are determined to show that they are trying to get the next additional stimulus package done, but no one should count on action this year,” Edward Moya, senior market analyst at Oanda, said.
Concerns around rising COVID-19 case counts throughout the US also weighed on valuations. Daily new cases surpassed 50,000 for five days in a row, reigniting fears of a second lockdown or stymied economic growth.
Global cases tore above 40 million on Monday, further fuelling anxiety around a prolonged economic slump.
The Monday slump follows a small rally that closed out last week.Stocks gained on Friday after retail sales beat expectations in September, signalling stronger-than-expected consumer spending trends heading into the holiday season. The University of Michigan’s consumer sentiment gauge also beat estimates for a preliminary October reading, adding to hopes that the US economic recovery can continue without near-term fiscal support.
All 11 S&P 500 sectors fell through the day. Utilities and materials names fared the best, while tech and communications stocks tumbled the most.
Concho erased early gains fuelled by oil giant ConocoPhillips announcing it will buy the firm in a $US9.7 billion deal. The acquisition marks the first major oil-industry deal since its collapse at the start of the pandemic.
AMC Entertainment jumped after the theatre chain announced it will reopen locations in New York and Long Island.
Tesla initially gained after Wedbush analysts raised their price target for the stock to $US500, implying a 14% rally from Friday’s close. The team praised the automaker’s better-than-expected deliveries in the third quarter, adding Tesla is on track to hit 500,000 deliveries this year. Still, the broader market downturn dragged on Tesla through the afternoon.
Spot gold rose as much as 1% to $US1,918.61 per ounce before paring gains. Treasury yields climbed and the US dollar fell against a basket of major peers.
Oil futures whipsawed and notched losses by the end of the trading day. West Texas Intermediate crude fell as much as 0.8%, to $US40.54 per barrel. Brent crude, oil’s international benchmark, sank 1.3%, to $US42.36 per barrel, at intraday lows.
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