- US stocks dropped on Tuesday as investors mulled Senate Republicans’ coronavirus stimulus package and a slew of earnings reports.
- The GOP unveiled its initial fiscal relief plan on Monday. The $1 trillion package includes another round of $1,200 payments and additional funds for small-business loans.
- Still, experts expect a long negotiation period as Republicans and Democrats spar over their respective proposals.
- Earnings misses from 3M and McDonald’s weighed on major indexes.
- Oil fell slightly, with West Texas Intermediate crude dropping as much as 0.8%, to $41.26 per barrel.
- Watch major indexes update live here.
US stocks slid on Tuesday as investors braced for prolonged negotiations between Democrats and Republicans on another round of economic stimulus.
The GOP on Monday revealed the text of its initial fiscal relief plan, named the Health, Economic Assistance, Liability Protections, and Schools Act The $1 trillion package includes another round of $1,200 direct payments, a $60 billion expansion of small-business loans, and more than $100 billion for schools.
Senate Republicans’ spending plan came in far below the $3.5 trillion sought by House Speaker Nancy Pelosi. Experts expect a long negotiation process before a package is passed.
The proposal also came after expanded unemployment benefits expired, pulling a key lifeline from millions of jobless Americans as the coronavirus continues to wreak havoc on the economy.
Here’s where US indexes stood soon after the 9:30 a.m. ET market open on Tuesday:
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Investors also digested earnings misses from McDonald’s and 3M. The restaurant chain missed expectations for quarterly profit and posted a 30% drop in revenue. 3M missed estimates for revenue and earnings as sales of personal protective equipment failed to outweigh a broader slowdown in demand for its office products.
Tech giants including Apple, Microsoft, and Alphabet also fell, further cutting into the sector’s outperformance.
Pfizer climbed after beating earnings estimates and raising its 2020 guidance.
Oil slumped as demand weakness continued to drag on the market. West Texas Intermediate crude fell as much as 0.8%, to $41.26 per barrel. Brent crude, oil’s international benchmark, slipped slightly before paring losses and trading largely unchanged.
Spot gold briefly reached a record $2,000 per ounce before erasing gains and turning lower. The precious metal has rallied through the summer amid a weakening US dollar and expectations that inflation will rise.
Bitcoin breached $11,000 late Monday and held the level through Tuesday morning before sliding below the threshold. Like gold, the digital currency has benefited from a turn to alternative assets and concerns that inflation will drag on traditional assets.