Stocks were rattled on Tuesday after President Trump issued a series of tweets announcing that his administration would end negotiations with congressional Democrats over proposals to spend upwards of $1.6 trillion in additional coronavirus relief funds.
“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,” Trump wrote.
The move, which came hours after Federal Reserve chair Jerome Powell warned that a lack of fresh stimulus measures would create “unnecessary hardship” for Americans, had an immediate impact on airline stocks as it appeared to throw out a proposed $25 billion bailout package for US passenger airlines.
American Airlines shares closed 4.5% lower following the tweets, with losses also seen by other major operators. United Airlines ended 3.6% lower, Delta Air Lines 2.9% lower and Southwest Airlines 2.4% lower.
Asian markets also fell immediately after opening on Wednesday, though most recovered their losses and became mixed in later trade. Tokyo, Manila and Jakarta markets remained in the red, however.
In a statement, American Airlines said it was “disheartened” by the decision, while Sara Nelson of the Association of Flight Attendants condemned Trump and congressional Republicans. “As Secretary Mnuchin and Speaker Pelosi moved close to a deal that would provide relief to working people across the country, President Trump issued one tweet to blow up the deal and leave millions of essential workers in freefall,” she said. “Senate Republicans will own this cruel manoeuvre that puts our economy in a tailspin unless they demand COVID relief now.”
Later on Tuesday, Trump issued another tweet calling for stimulus to support airlines and small businesses. “The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business,” he wrote.
The stock market was previously buoyed by indications that an agreement on fresh stimulus measures might soon be reached.