Stimulus Hopes Fade As Trump Ends Talks

A day after he posted a tweet encouraging lawmakers to work together to secure a stimulus package, President Trump put an end to ongoing talks between senior Democrats and Republicans who were attempting to hammer out a deal. The abrupt U-turn was a shock to both investors and the political sphere, as it came shortly after Federal Reserve chairman Jerome Powell cautioned there would be severe economic consequences if more support is not provided to the economy. Ten of the S&P 500’s 11 sectors slumped into the red after the news, with consumer discretionary stocks hit hardest - as a failure to further support household finances and small businesses could have a major impact on consumer sentiment and spending. Trump said on social media that he has instructed representatives to stop negotiating on a deal until after the Presidential election, and disagreed with Powell’s take on the economy.

Much of the potential losses for European markets this morning were offset by some strong earnings reports, in particular the UK’s largest supermarket Tesco (TSCDY) rising as much as 4%, following their update. Despite an overall fall in profit due to increased costs associated with COVID-19, the firm has almost doubled its online business and hiked its interim dividend.

Lawmakers put forward idea of breaking up tech giants

Among the three major US stock indices, the Nasdaq Composite fell hardest in Tuesday afternoon’s selloff, closing the day 1.6% down. Names including eBay (EBAY) and video game firm Electronic Arts (EA) were among the biggest losers in the index, falling 4.5% and 4.1% respectively. In the S&P 500, which fell by 1.4%, Boeing (BA) fell hardest at -6.8%, with energy and airline names among the rest of the bottom 10.

Also making headlines on Tuesday was a 400-plus-page report released on Tuesday by the House of Representatives antitrust subcommittee, which claims that Amazon (AMZN), Apple (AAPL), Google (GOOGL) and Facebook (FB) have abused their marketing power. The report says that the marketing power the firms wield effectively means they control access to markets, letting them pick winners and losers economically. To combat this, the report suggests a rewrite of US antitrust law and forcing companies to restructure, including splitting up business lines. All four firms mentioned above closed the day 2% to 3% lower after the publication came out.

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Adam Reynolds 1 month ago Member's comment

I don't understand why Trump would do this. It can only hurt his reelection chances. Americans are suffering and he just told them to pretty much go F themselves until he wins the election. Well he pretty much just guaranteed he won't.