Stocks slipped on Wednesday, easing from record highs set earlier in the day traders weigh the prospects of new fiscal stimulus.
The Dow Jones Industrial Average traded 40 points lower, or 0.1%. The S&P 500 slipped 0.2%. The Nasdaq Composite pulled back by 0.4%. Earlier in the session, the Dow was up more than 100 points.
The major averages gave back their gains after Senate Majority Leader Mitch McConnell told Politico that Republicans and Democrats were “still looking for a way forward” on additional fiscal aid.
Those remarks came after Treasury Secretary Steven Mnuchin pitched Tuesday a $916 billion stimulus package to House Speaker Nancy Pelosi.
McConnell, meanwhile, said he wants Congress to pass a coronavirus relief bill with neither legal immunity for businesses nor state and local government relief. Senate Minority Leader Chuck Schumer, D-N.Y., said McConnell’s proposal to move stimulus talks forward without state and local government aid is not in good faith.
“The US fiscal stimulus process has turned somewhat acrimonious, but Congress has another 1.5 weeks to try and reach a compromise (as the budget deadline is about to get pushed” to Dec. 18, said Adam Crisafulli of Vital Knowledge.
The volatile negotiations come amid the worst days of the coronavirus pandemic so far. More than 200,000 Americans are testing positive for the coronavirus every day on average, according to a CNBC analysis of Johns Hopkins University data.
The United States has seen 1 million new cases in just four days, bringing the national total to over 15 million.
However, Wall Street’s concerns about the latest spike in Covid-19 cases have been eased somewhat after the U.K. started its rollout of Pfizer’s vaccine on Tuesday.
The news drove the Dow, S&P 500 and Nasdaq to record highs in the previous session. The Dow gained about 100 points on Tuesday, while the S&P 500 and Nasdaq advanced 0.3% and 0.5%, respectively.
“Covid is raging and still no stimulus package? Never mind, with vaccinations already underway, it may be impossible to keep this stock market from rising through the holidays,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC.
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