Wall Street Close: Down as markets guess that Congress underestimates the economic tidal wave

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  • Nasdaq unofficially closes down 192.26 points, or 1.75%, at 10,776.10.
  • DJIA unofficially closes down 103.16 points, or 0.37%, at 27,688.28.
  • S&P 500 unofficially closes down 26.94 points, or 0.80% , at 3,333.53.

The US benchmarks were wobbled on Tuesday by the swirling pessimism over the US economy and a forever nearing fiscal cliff on the back of comments about a stalemate in talks over a fiscal stimulus deal.

In late session, the US Senate Republican leader Mitch McConnell told Fox News that White Housenegotiators had not spoken on Tuesday with Democratic leaders in the US. 

Consequently, unofficially, the Dow Jones Industrial Average lost 101.13 points, or 0.36%, to2 7,690.31 while the S&P 500 dropped 26.14 points, or 0.78%, to 3,334.33 and the Nasdaq Composite lost 182.74 points, or 1.67%, to 10,785.62.   

“If Congress underestimates the economic tidal wave that is coming, even by the smallest of margins, we are all going to be swept away,” said Illinois State Treasurer Michael Frerichs.

Already, the US Labor Department has reported that some 1.5 million state and local government jobs were lost from February to June, adding to the tens of millions of private-sector jobs that have been shed nationwide.

For the moment, struggling small businesses are running out of their initial aid with no replenishment in sight. State and local governments face mounting budget shortages that could spur significant layoffs this fall. And schools are waiting on much-needed funding to open safely.

Struggling households bolstered by previous direct federal payments may get no more cash anytime soon. And expanded unemployment benefits may drop substantially — even if Trump’s move survives in court — while millions remain out of work. Trump’s payroll tax deferral could also prove difficult to implement and is, at least for now, only a temporary reprieve rather than a permanent cut,

POLITICO wrote today.

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