The Dow Jones fell over 500 points, the biggest drop this week as the Fed warns of a financial hit that will collapse the U.S. markets. President Donald Trump is against Dr. Anthony Fauci’s opinion about his warning on reopening the economy.
The S&P 500 and Nasdaq slipped at around 50 and 139 points, respectively. Yesterday’s trading session on Wall Street was a bloodbath as the majority of companies fell to new lows.
Another trigger that may have caused the Dow Jones to plummet this week is Trump’s recent tweet about the China trade deal as he continues to blame them for disrupting the economy.
As I have said for a long time, dealing with China is a very expensive thing to do. We just made a great Trade Deal, the ink was barely dry, and the World was hit by the Plague from China. 100 Trade Deals wouldn’t make up the difference – and all those innocent lives lost!
— Donald J. Trump (@realDonaldTrump) May 13, 2020
Dow Jones stock futures are trying to recover today preventing another sell-off for later’s trading session.
Fed: Policymakers to step up to prevent prolonged recession
It looks like one of the biggest investors may be right about the American’s love for individualism as economic tensions in the U.S. are becoming worse every single day.
Fed Chairman Jerome Powell said that the U.S. Congress may need to be more involved with creating additional measures to help the economy.
The chairman noted the unparalleled strength of the fiscal and monetary measures already taken by the Fed but stressed the importance of assuring that the deepest slump since the Great Depression does not get out of hand.
However, recent reports come in as Congress has unveiled a new US$3 trillion [AU$4.68 trillion] coronavirus relief package and the party leaders are expected to vote this Friday. The Dow Jones may be in peril if fiscal solutions are not carried out soon.
The Fed also added that they are not considering going to negative interest rates, despite Trump’s nudging to taking its benchmark overnight borrowing rate to below zero.
Fauci: U.S. could face ‘suffering and death’
On top of Fed pressure on the Dow Jones along with the rest of the U.S. markets, the White House health advisor Dr. Anthony Fauci warned at a Senate hearing that rushing to reopen might be even more costly to the economy.
He adds that it could also cripple states “on the road to try to get back to economic recovery.” Recently, the White House has laid out a plan that allows U.S. states to gradually reopen local businesses. However, Fauci worries that some states are loosening their social distancing measures amid their rising cases on COVID-19.
But President Donald Trump told reporters at the White House that he was “surprised” by Fauci’s answers regarding his stand on reopening the U.S. states. However, he did not specify which answer from Fauci he found as unacceptable.
A recent report also says that Trump scrapped CDC’s recommendations for reopening the economy.
Investors shall witness more drama on Wall Street once again, as the Dow Jones prepares for the next trading sessions ahead.
Featured image courtesy of Brookings Institution/Flickr