Warning on Economic Recovery

 

S&P, Nasdaq dip as Jerome Powell warns on economic recovery

The domestic rebound could still slip into a downward spiral if the coronavirus is not effectively controlled and growth sustained, Powell said, in a call for more help to businesses and households.

The S&P 500 and the Nasdaq retreated on October 6 as Federal Reserve Chair Jerome Powell warned the US economic recovery remained far from complete, with a selloff in some of the biggest technology companies also weighing on sentiment.

The domestic rebound could still slip into a downward spiral if the coronavirus is not effectively controlled and growth sustained, Powell said, in a call for more help to businesses and households.

"Markets are worried about what the Fed knows that we don't know," said John Augustine, chief investment officer at Huntington National Bank in Columbus, Ohio."The things that are obvious to us are that small businesses are closing and unemployment remains high in the services sector. The Fed aggressively wants to address both of those with more fiscal stimulus."

Comments from officials that a stimulus deal was still possible had lifted the three main stock indexes on Monday, helping them recoup losses from last week that were sparked by news that President Donald Trump had contracted COVID-19.

Trump returned to the White House on Monday from the Walter Reed Medical Center military hospital, but faced fresh backlash for removing his mask upon his return and urging Americans not to fear the disease that has killed more than 209,000 in the United States.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke by phone on Monday about fresh relief measures and were preparing to talk again on Tuesday.