All three of the major U.S. stock market indices lost ground on Monday after the U.S. Senate again was unable to push forward a nearly $2 trillion economic rescue package, disappointing investors hoping to see a speedy authorization of the relief legislation.
The repeat stalling of the Senate bill came just hours after the markets saw a short-lived surge during the session after the U.S. Federal Reserve unleashed its own set of new and extensive measures to help keep corporate credit flows and other critical parts of financial markets functioning smoothly.
The U.S. Fed said it would purchase Treasuries and mortgage-backed securities “in the amounts needed to support smooth market functioning,” showing the central bank is willing to go far beyond the $700 billion in new purchases announced last week.
But those gains were quickly wiped away as the Dow Jones Industrial Average dropped -582.05 points to end at 18,591.93, its first close below 19,000 since November 2016.
The blue-chip average briefly wiped out its gains since Election Day 2016 when it slumped to session lows at 18,332.74.
The Standard & Poor’s 500 lost -67.52 points, or -2.93% to finish at 2,237.40, erasing all its gains since President Donald Trump was inaugurated, while the tech-heavy Nasdaq Composite slipped just -18.84 points or -0.27% to 6,860.67.
Nine of the 11 sectors in the index closed lower, led by broad-based losses in energy, financial and real estate shares.
On Friday, stocks posted their worst week since the 2008 financial crisis.
Meanwhile, the news of the further falls in shares will likely be a blow to President Trump, who has frequently touted the stock market’s gains as an indication of his successful economic handling.
The economic collapse surrounding the coronavirus pandemic and the public health steps taken to contain it have reportedly started to grind on Trump.
Last Sunday, he suggested that he might lift some restrictions if the economic pain becomes too deep.
“WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF,” Trump wrote in a late-night tweet on Sunday.
“AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!”
The economy has ground to a halt as people stay home and practice social distancing and businesses that attract groups of people have shuttered.
Major banks have forecasted that the United States has already fallen into a recession, and that unemployment rates could surpass those seen at the height of the Great Recession in 2009.