Shares fell on Monday as prospects for a final push between the White House and Congress faded to negotiate a coronavirus relief deal.
The Dow Jones Industrial Average fell sharply at the closing bell, dropping 408.8 points, or 1.43%.
The losses came as the deadline set by House Speaker Nancy Pelosi (D-Calif.) For a possible bailout was drawing closer. Over the weekend, Pelosi said a deal on coronavirus aid must be hit Tuesday for Congress to pass legislation before election day. But losses on Wall Street accelerated in the afternoon as the closing bell approached and a breakout in Washington never materialized.
The S&P 500 index fell 56.9 points, or 1.63%, at the end of the trading day, while the Nasdaq, the Nasdaq, lost 192.7 points, or 1.65%.
For months, investors had expected another round of government relief, with the potential of hundreds of millions of dollars for struggling households and businesses. But talks about a deal have repeatedly advanced and blocked, although Federal Reserve officials and other economic experts have said the US recovery depends on strong financial support from the federal government. With just one day before the deadline, investor sentiment appeared to be worsening.
Investors also took note of some positive economic developments on the world stage. China announced Monday that its economy grew 4.9% between July and September, compared to last year. But the financial update has been tempered by the harsh reality of the contagion itself. The number of confirmed cases worldwide exceeded 40 million for the first time. And many states are seeing an increase in new infections in the past seven days, including Texas, Florida, Wisconsin and Michigan.
Even with Monday’s losses, all three major indexes are expected to post gains for October.