U.S. stocks and financial markets posted losses Tuesday amid predictions of slow economic recovery.
Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell testified before the Senate Banking, Housing and Urban Affairs committee earlier Tuesday about the results of the $2.2 trillion federal stimulus package.
Powell said the U.S. economy could take until the end of 2021 to recover. Mnuchin was more optimistic, saying that the economic conditions are expected to improve in the third and fourth quarters.
Traders on Wall Street reflected concerns about dim economic prospects.
U.S. markets stumbled Tuesday after significant gains the day before. The Dow Jones Industrial Average lost 390 points, or close to 1.6%, to close at 24,206.
The S&P 500 was down 1%, nearly 31 points, ending at 2,922.
The Nasdaq Composite was down 0.5%, or 49 points, to settle at 9,185 at the closing bell.
European markets also posted losses at the end of the trading day.
The FTSE 100 in London closed 0.77% lower, while the CAC-40 in Paris lost 0.89%. Frankfurt’s DAX gained a meager 0.15%.
The poor showing in Europe was in contrast to Asia’s strong finish, with all major indexes closing in positive territory. Seoul’s KOSPI index led the way, earning 2.2%, while Hong Kong closed almost 1.9% higher. The Nikkei in Tokyo earned close to 1.5%, and Shanghai was 0.8% higher.
Earlier, Asia’s significant gains mirrored Monday’s big day on Wall Street, where stocks surged after U.S.-based biotechnology company Moderna said its initial tests for a possible coronavirus vaccine produced favorable results from a small sample of people. The company said it is launching a large clinical trial in July to determine whether the vaccine is safe and effective.
In oil trading, the price of U.S. benchmark West Texas Intermediate crude was $32.36 per barrel, while the international benchmark Brent crude traded at $34.44 per barrel.
