US stock markets continued falling on Monday as investors worried Congress would not agree to more stimulus cash before the election and reacted to an uptick in coronavirus infections.
The Dow Jones closed down 510 points, or 1.9% after a late rally. The S&P 500 lost 1.2% and the tech-heavy Nasdaq Composite closed just 0.1% lower after a late-day surge in tech stocks.
US stock markets are entering a fourth week of selloffs, and Monday was the first time since February that the S&P 500 has posted four straight daily losses.
“Today’s market action reflects investors’ frustration with Congress’s inability to pass additional stimulus,” Jack Ablin, the chief financial officer at Cresset Capital wrote in a note to investors. “Federal Reserve chairman Jay Powell, in a speech last week, stressed ‘more fiscal support is likely to be needed’ to help struggling small businesses and the roughly 11 million out-of-work Americans.”
Recently the Fed signaled that interest rates would likely remain around 0% until at least 2023.
After months of discussion Congress has yet to reach an agreement on more funds for businesses and people hit by the pandemic recession. Washington is now locked in a bitter fight over finding a successor to the supreme court justice Ruth Bader Ginsberg.
Some states like California have paused their unemployment claims for two weeks, right after their Governor stated they would not have enough money to pay for a simply emergency unemployment extension.
The US selloff followed a sharp drop in share prices in London. The FTSE 100 lost 3.3%, its worst day in three months, after the UK’s Covid-19 alert level was raised to four, meaning the virus is “high or rising exponentially”. The move is likely to trigger a new round of restrictions in the UK.