Trump cancels talks with Democrats saying that negotiations will stop until after the election
Following the initial rise and the biggest single-day gain in nearly four weeks, Wall Street stocks closed lower overnight after President Donald Trump said he would end negotiations on a new fiscal stimulus package. Earlier in the day, Fed’s Powell has repeatedly stressed the importance of fiscal stimulus to the recovery and maintained that the path forward is highly uncertain. As a result of a retreat, the Dow Jones Industrial Average gave up a gain of more than 200 points, falling 1.3%, the S&P 500 finished 1.4%, lower, and the Nasdaq Composite fell 1.6%.
Asian equities were mixed-to-higher on Wednesday, with MSCI’s index of Asia-Pacific shares outside Japan edged 0.2% higher to fresh two-week highs despite Trump canceled talks with Democrats saying that negotiations will stop until after the election. Hong Kong’s Hang Seng added 0.7% while Japan’s Nikkei fell 0.2%. China’s stock markets are closed for holidays until October 9.
In Europe, stocks opened on a mixed note while U.S. equity futures climbed as investors digested the reports that crucial stimulus talks were called off by President Donald Trump. The Stoxx Europe 600 index was flat, along with the German DAX 30 and the French CAC 40. Later today, investors will shift focus to several Federal Reserve speakers and the minutes of the Federal Reserve’s latest policy meeting.
The greenback received a boost later on Tuesday amid the recent pullback in stocks amid the resurgent safe-haven demand. However, the local pressure surrounding high-yielding currencies has eased since, and the dollar turned slightly lower today. EURUSD bounced from the 1.1725 intermediate support and is back flirting with the key 20-DMA. On the upside, the immediate barrier arrives at 1.18. The common currency may need the additional catalyst to challenge this hurdle. In a wider picture, the technical indicators continue to point to a bullish trend in the EURUSD pair.
