New York (CNN Business)Stocks took a dive Tuesday afternoon after President Donald Trump said he ordered an end to stimulus negotiations until after the November election.
The Dow (INDU) swung more than 600 points following the announcement and closed down 1.3%, or 376 points. The S&P 500 (SPX) tumbled 1.4%, and the Nasdaq Composite (COMP) finished down 1.6%.
"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 tweeted.
The announcement comes just hours after Federal Reserve Chairman Jerome Powell once again called for more stimulus to keep the economic recovery going. He said the risk of doing too little in terms of stimulus was far greater than the risk of doing too much.
But the President disagrees: "Our Economy is doing very well. The Stock Market is at record levels, JOBS and unemployment...also coming back in record numbers," he added on Twitter.
The unemployment rate stood at 7.9% in September, down sharply from the crisis peak. That said, it's still the highest jobless rate on record going into a presidential election. The country still remains down 10.7 million jobs from February.
The recovery has been a tale of two economies: For some, things have improved greatly since the economy has opened up again after the spring lockdown. But for millions of Americans, the economic situation is more dire than ever before. Whole industries have been devastated by the virus.
Trump's decision deals a major blow to those hoping for more stimulus to help the country get through this crisis. For jobless Americans, it means they will have to make ends meet with less money than at the start of the crisis, when the government provided a $600 weekly supplement to boost benefits. These benefits ran out at the end of July.
Trump signed an executive order in August, bolstering benefits by a weekly $300 by diverting money from the Federal Emergency Management Agency. FEMA said that some states have already exhausted their allocated amounts. States could opt to add an additional $100 a week, bringing it to $400.
It has been a wild few weeks for investors between the President's Covid diagnosis, his hospitalization over the weekend, uncertainty surrounding the economic outlook, as well as the possibility of a contested election.
-- CNN's Phil Mattingly contributed to this article.
