Stocks rise as Trump tweets keep market spinning

Stocks closed higher Wednesday after President Donald Trump appeared to backtrack on his decision to halt talks on another rescue effort for the economy.

The S&P 500 rose 1.7% after Trump sent a series of tweets saying he’s open to sending out $1,200 payments to Americans, and limited programs to help airlines and small businesses.

The tweets late Tuesday came just hours after Trump sent the market into a tailspin with his declaration to halt talks on a stimulus until after the election.

“What we’ve seen over the last 24 hours is just confirmation that the market is really addicted to stimulus from the government,” said Sal Bruno, chief investment officer at IndexIQ. “When it thinks it’s not getting it, it sells off, and when it looks like there’s a possibility for that it rises, as we’ve seen today.”

The Dow Jones Industrial Average gained 1.9%. The Nasdaq composite climbed 1.9%, despite a call by Democratic lawmakers for Congress to rein in the Big Tech companies.

But much of the market’s attention remains fixed on the prospects for more stimulus for the economy from Washington. Wednesday’s gains helped the S&P 500 recoup all of its loss from the day before, when Trump’s tweets suddenly sent it from a 0.7% gain to a 1.4% loss.

Some analysts characterized Trump’s move as a negotiating ploy. “One of Mr. Trump’s favorite negotiating tactics, judging by past actions, is to walk away from the negotiating table abruptly, the intention being to frighten the other side into concessions,” said Jeffrey Halley of trading and research firm Oanda.

In the longer term, many investors say a big stimulus package may still be possible regardless of what Trump says. A Democratic sweep of the upcoming elections would clear the way for a big government program after the transfer of power, and Wall Street has begun to see a blue wave as more likely than before.