U.S. equity markets continued to fall on Monday as investors feared Congress would accept no more stimulus cash ahead of the election and respond to a rise 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 high tech Nasdaq Composite closed just 0.1% lower after a late-day surge in tech stocks.
U.S. stock markets are entering a fourth week of sell-offs, ending a rally that had driven them to record highs over the summer. Monday was the first time since February that the S&P 500 has posted four consecutive daily losses.
“Today’s market action reflects investor frustration at Congress’ inability to pass further stimulus,” wrote Jack Ablin, CFO of Cresset Capital in a note to investors. In a speech last week, Federal Reserve Chairman Jay Powell stressed that ‘additional budget support will likely be needed’ to help struggling small businesses and the estimated 11 million Americans without jobs.
After months of discussion, Congress has yet to reach agreement on more funds for businesses and people affected by the pandemic recession. Washington is now locked in a bitter struggle to find a successor to Supreme Court Justice Ruth Bader Ginsberg.
The US liquidation followed a sharp drop in stock 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 increasing exponential ”. The move is likely to trigger a new round of restrictions in the UK.