Markets react as Trump halts stimulus talks

European stocks are expected to open lower Wednesday as markets around the world react to President Trump’s decision to halt stimulus talks until after the November election.

London’s FTSE is expected to open 14 points lower at 5,930, Germany’s DAX down 62 points at 12,851, France’s CAC 40 down 24 points at 4,871 and Italy’s FTSE MIB 76 points lower at 19,270, according to IG.

Markets in the U.S. and Asia-Pacific have been reacting Trump’s tweet on Tuesday that the White House is halting talks with Democrats about a second coronavirus stimulus deal.

The Dow Jones Industrial Average closed down 375 points, having rallied in the session on hopes that there would be a second relief package to prop up markets as the coronavirus outbreak continues. 

“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump said in a tweet on Tuesday. 

The S&P 500 lost 1.4% and the Nasdaq Composite fell 1.57% on Tuesday, while oil prices also declined. U.S. stock futures were little changed in overnight trading.

Trump’s latest move came as U.S. Federal Reserve Chairman Jerome Powell on Tuesday called for continued aggressive fiscal and monetary stimulus for an economic recovery he said still “has a long way to go.”  Also on Tuesday, the International Monetary Fund’s Managing Director Kristalina Georgieva said the path ahead will be a “difficult climb.”

Retailer Tesco releases interim results Wednesday and France releases import and export figures and Spain releases its latest industrial output data. staff contributed to this market report.

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