Wall Street fell Tuesday after President Donald Trump said he would be halting all negotiations over a new round of coronavirus stimulus relief.
The Dow Jones Industrial Average fell by almost 400 points, having been up by more than 200 points earlier in the day. The S&P 500 and the Nasdaq were down by around 1.5 percent each.
"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 tweeted Tuesday afternoon.
Stocks have surged since Trump's announcement Monday that he would be leaving the hospital after treatment for Covid-19, but investors remain firmly focused on additional fiscal relief.
Speaking at a virtual economic forum Tuesday morning, Federal Reserve Chairman Jerome Powell again stressed the need for aid as millions of Americans remain out of work and face potential eviction if they do not get further government assistance.
"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 in a keynote address to the National Association for Business Economics.
While he acknowledged progress in some areas of job creation, he said the economic recovery still has "a long way to go."
Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, D-Calif., have so far failed to reach any compromise after weeks of debating the finer points of a new stimulus deal.
Trump joined Mnuchin, Senate Majority Leader Mitch McConnell, R-Ky., and House Minority Leader Kevin McCarthy, R-Calif., on a phone call Tuesday to discuss coronavirus relief, after which Trump said Pelosi was "not negotiating in good faith."
In response to Trump's demand for his team to call off negotiations, Pelosi said the president was "putting himself first at the expense of the country."
Trump’s decision will hamper efforts to revive the economy, Cleveland Federal Reserve President Loretta Mester told CNBC Tuesday.
“There’s still a lot of households and a lot of small businesses that really need that kind of help, and even though the recovery has come in somewhat stronger than many of us thought, it would, we’re still in a pretty big hole,” Mester said.