All three major U.S. stock indexes fell sharply on Tuesday, triggering the first ‘circuit breaker’ in 23 years and suspending trading for 15 minutes shortly after the market opened, amid a spreading pneumonia epidemic in the United States. By the close of trading, all three major U.S. stock markets had plunged more than 7%. The dow jones industrial average fell 2013.7 points, or 7.79%, to 23,851.02, its biggest one-day drop since October 15, 2008. The s&p 500 fell 7.6 percent, while the NASDAQ fell 7.29 percent.
US President Donald Trump is on pins and needles over the stock market crash, which he tweeted three times in a row immediately after. Mr. Trump first said that the Saudi oil price cut, which was widely seen as causing the stock market to fall, was a “good thing” for consumers. Then he blamed Saudi Arabia and Russia for fighting over oil prices, and media scaremongering.
Meanwhile, as the stock market tumbled, Mr. Trump tried to launch fresh stimulus measures to boost the battered economy and confidence in the markets. According to CNN, Mr. Trump recently said he would push for a payroll tax cut and help hourly workers during a new bout of pneumonia. Trump said at a news conference Tuesday that he would discuss a possible payroll tax cut with congress and ensure aid for hourly workers, CNN reported. White House officials said Mr. Trump had discussed with his team of advisers a stimulus package to blunt the economic impact of the new pneumonia virus.
Mr. Trump reportedly said he would reveal more details of the “very dramatic” move at a press conference on Tuesday afternoon. As the virus spread, trump saw the plummeting stock market as a bad sign for his political future.
Mr. Trump was speaking at a White House news conference. The announcement came after Mr. Trump held a meeting with aides to discuss an economic stimulus package aimed at reducing the impact of the coronavirus on the economy after the stock market plunged and concerns about the administration’s handling of the crisis continued to mount.
Mr. Trump’s remarks were brief and did not answer questions, leaving it to other officials to discuss how to respond to the outbreak.
“We’re going to meet with Mitch McConnell, the republican in the house of representatives, and everyone is talking about a possible payroll tax cut or cut, a substantial cut,” Trump said.
Mr. Trump added: “we’re also going to talk about getting help to people who are paid by the hour, so they don’t miss out on a paycheck.”
While some members of Congress have publicly floated the idea of stimulating the us economy and helping affected industries, Mr. Trump had not yet approved any specific action before Monday, and officials differed on how big the impact might be.
Some of the ideas under consideration include a deferred tax on airlines, cruise lines, and hotels, all of which have been hit hard by the virus. The White House is also weighing expanding paid sick leave, a major concern for some White House officials who fear the virus could spread further if service members show up sick.
Some of Mr. Trump’s republican Allies also lobbied him to suspend the payroll tax, though, before Monday, Democrats in Congress and senior administration officials had played down the possibility of doing so.
A senior administration official told CNN on Monday that the White House was reconsidering the possibility of passing a major stimulus bill, but both Trump and his top economic adviser, Larry Kudlow, said on Friday that the White House was not interested in the move.
Senate finance committee chairman chuck Grassley told reporters Monday that “everything is on the table” as lawmakers consider new stimulus measures. The Iowa republican won’t rule out paid sick leave or payroll-tax leave because negotiations have already begun.
But some Republican senators are not keen on the idea.
Asked if he supported a democratic spending plan or a republican tax cut to boost the economy, senator John Cornyn, Republican of Texas, said, “I think it’s too early. I usually like to cut taxes, but I think it’s a bit premature again.”
Treasury Secretary Steven Mnuchin will have lunch with Republican senators on Tuesday to discuss the economic stimulus plan, CNN has learned.
At a news conference on Monday, Mr. Mnuchin said he was in daily contact with fed chairman Colin Powell. He played down fears that the us economy was heading for a recession, saying the situation was different from that of 2008.
A senate republican said senators had a real discussion on Monday about what the White House might propose on Tuesday, but that members of the Republican leadership meeting were “not very interested in some of the options on the table.” “We’ve got to tidy it up. We’ve got to figure out what that means.”
The White House has also invited Wall Street executives, including bank CEOs, to a meeting this week on the new coronavirus, according to an official familiar with the plans. The meeting is likely to take place later this week. The official declined to provide a list of expected participants.
Kudlow told reporters Friday that the White House is considering “timely, targeted” measures to help industries affected by the virus, but that “we are not looking at these large-scale, federal, money-throwing programs.”
Us stocks plunged on Monday as investors faced an oil price crisis and fresh concerns about the spread of a us coronavirus. More than 600 cases of coronavirus have been reported in the United States, with 22 deaths.
Mr. Trump has reportedly been privately playing down the seriousness of the coronavirus outbreak, insisting it will be short-lived and over within months.
But what angers him most is the economic impact of the coronavirus. Mr. Trump told a crowd in Florida over the weekend that he thought the market had overreacted to the coronavirus. Like the whole course of the disease, Mr. Trump’s biggest fear is that, before his re-election, he will be unfairly blamed for the economic downturn.
Mr. Trump linked that private feeling to public information, compared it to the death toll from the flu, played down the severity of the virus and blamed the news media, Russia and Saudi Arabia for the market losses.
“Saudi Arabia and Russia are arguing over the price and flow of oil. That’s why the stock market is down, and fake news!” “Trump tweeted on Monday.
Mr. Trump also said lower oil prices were good for consumers. Some of Mr. Trump’s Allies, including those who have worked for him in the White House, said Mr. Trump’s focus on the fed would not help him through the crisis.
Gary Cohn, Kudlow’s predecessor at the National Economic Council, told CNN on Monday that if the coronavirus crisis continues, the government may need to bail out airlines, and that monetary stimulus will do little to ease the Economic pain.
If this crisis continues for another week or two, we should bail out the airlines. Government assistance will help prevent mass layoffs.”
Mr. Kohn said the fed’s surprise emergency rate cut last week was ineffective. The move did little to stabilize markets, and Mr. Trump later said a half-point cut was not enough.
“You can’t fight an emotional and psychological war with fiscal easing,” says Mr. Kohn. People aren’t spending more money — going to restaurants, booking holidays — because the fed has cut interest rates.”
Instead, Kohn believes the government should focus on getting tax cuts faster. This could help workers in the “gig economy”, who are being hurt as consumers stay at home and avoid public places.