US stocks plunged again Wednesday as Wall Street waited for the Trump administration to detail exactly how it plans to address the coronavirus’s economic impact.
The Dow Jones industrial average sank as much as 762.6 points, or 3 percent, in early trading a day after hopes for a fiscal stimulus caused stocks to surge. The blue-chip index gained more than 1,100 points Tuesday.
The S&P 500 dropped as much as about 2.9 percent after the opening bell while the Nasdaq composite lost as much as 2.6 percent. The two indices each jumped 4.9 percent Tuesday in a wild day of trading.
President Trump promised a “very dramatic” fiscal stimulus package on Monday to stanch the economic bleeding caused by the coronavirus outbreak. But he failed to deliver specifics of such a package Tuesday even after meeting with Senate Republicans.
“The problem facing markets today … is that precisely zero concrete policies have emerged,” Jeffrey Halley, a senior currency analyst at OANDA, wrote in a commentary. “Extra spending and where it is spent must be approved by Congress, and I suspect therein lies the problem.”
Trump has suggested that the stimulus may include funding for sick leave, aid for the struggling airline and cruise ship industries, and temporary cuts to payroll taxes. The president went so far as to float temporarily eliminating the payroll tax for employees and employers through the rest of 2020 in his meeting with GOP lawmakers, according to news reports.
The drop in US stocks came after the Bank of England cut its key interest rate by half a percentage point, following a similar move by the Federal Reserve last week. Joe Biden’s victories in several Democratic presidential primaries Tuesday night didn’t appear to comfort investors even though his strong Super Tuesday performance inspired a bounce in the market last week.
Wednesday’s declines continued another turbulent week for Wall Street that started with the Dow shedding more than 2,000 points as an oil-price war between Saudi Arabia and Russia added to the market’s fears about the coronavirus outbreak.
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