Stock Index Futures Reverse After Trump's Tweet Supporting Airline Relief, PPP

U.S. markets fell sharply on Tuesday as President Donald Trump stalled the stimulus talks. Dow Jones and the S&P 500 futures have reversed course after Trump tweeted in support of signing the $25 billion airline relief package and $135 billion Paycheck Protection Program late Tuesday.

What Happened: On Tuesday afternoon, Trump, in a series of tweets, said he was halting the stimulus bill after negotiations failed. Dow Jones and the S&P 500 fell sharply closing 1.34% and 1.40% lower, respectively.

Late Tuesday, Trump tweeted in favor of supporting the $25 billion airline relief package and $135 billion Paycheck Protection Program, saying "both will be fully paid from unused funds from the Cares Act".

The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!

— Donald J. Trump (@realDonaldTrump) October 7, 2020

Major airline stocks fell on Tuesday as they were hoping for a relief package soon to avoid job cuts and furloughs.

Many economists said that a stall in stimulus would push people into poverty and hurt the economic recovery which is volatile already. "This is incredibly cruel and also just terrible economics," Heidi Shierholz, the director of policy at the Economic Policy Institute, told Business Insider.

The latest jobs report showed 661,000 jobs were added in September, the smallest monthly increase since April.

Benzinga's Take: Trump is known to monitor and cite the stock market's performance as an indicator of his performance. His latest twist supporting the airline relief bill is not surprising considering the Wall Street's reaction to stalled stimulus talks on Tuesday.

The market will be sensitive to headlines as the stimulus bill remains in a stalemate. Airline and retail stocks will be the most susceptible.

The airline stocks to watch would be Southwest Airlines Co LUV, American Airlines Group Inc AAL, Delta Air Lines, Inc. DAL, United Airlines Holdings Inc UAL, Alaska Air Group ALK, Spirit Airlines Inc SAVE, JetBlue Airways Corp JBLU, SkyWest, Inc SKYW and Hawaiian Holdings, Inc. HA.

Price action: Dow Jones futures are trading up 0.38% at press time, S&P500 futures are trading up 0.34% and Nasdaq 100 futures are up 0.37% at press time.

WTI Crude futures are down 1.57% to $40.03 and Gold futures are down 0.99% to $1,889.20.

Photo Credit: Gage Skidmore via Wikimedia.