Tuesday 6 October 2020 8:36 pm

US stocks fall after President Trump calls off stimulus talks

President Donald Trump has called off talks with congressional Democrats on a new stimulus package until after November’s election, sending US stocks sharply lower.

Less than 24 hours after being discharged from hospital, Trump said he had instructed his representatives to stop negotiating with the Democrats until after the election.

Read more: FTSE 100 slips after Donald Trump leaves hospital

In a tweet the US president said Nancy Pelosi, the Democratic speaker of the House Representatives, was “not negotiating in good faith”.

“I am rejecting their… request, and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”

US stocks fell sharply into the red, reversing solid gains after big swings in recent sessions.

The S&P 500 and Dow Jones both shed 1.2 per cent while the Nasdaq Composite dropped 1.4 per cent.

Republicans and Democrats have been at an impasse for months over a relief package, but negotiations between Pelosi and Treasury secretary Steven Mnuchin had picked up in recent days.

Trump’s announcement followed US Federal Reserve Chair Jerome Powell’s warning of serious economic repercussions if Congress fails to pass additional stimulus.

“The recovery will be stronger and move faster” if the government supports the economy”until it is clearly out of the woods”, Powell said in remarks to be delivered at a virtual conference on Tuesday.

Read more: President Trump says he will leave hospital tonight

“Even if policy actions prove greater than needed they will not go to waste”, he added.

Trump also tweeted that he had told Senate majority leader Mitch McConnell to “instead focus full time on approving my outstanding nominee to the United States Supreme Court, Amy Coney Barrett.”

The time for Senate Republicans to confirm Barrett to the court is narrowing as a growing number test positive for coronavirus.