U.S. stocks slumped on Tuesday after U.S. President Donald Trump said he has asked White House officials to call off COVID-19 relief negotiations until after the election.

This was hours after Federal Reserve Chair Jerome Powell urged the Congress to pass a package, saying that providing too little relief would weaken the recovery from the recession brought by the pandemic.

The Dow Jones industrial average fell 376 points of 1.3 percent.

This was from 27,772 after soaring about 200 points earlier, with expectations for an agreement.

The Standard & Poor's 500 index was down 48 points or 1.4 percent. This was at 3,361.

Meanwhile, Nasdaq reduced 1.6 percent to 11, 155.

Trump said in a mid-afternoon tweet that the White House has made a "very generous offer" of a $1.6 trillion relief package, while Speaker Nancy Pelosi is seeking $2.4 trillion.

Trump claimed that Pelosi's negotiating terms are not in good faith.

"I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business," Trump was quoted.

The Dow earned 466 points on Monday and gained another 200 points earlier Tuesday.

This was while Pelosi and Treasury Secretary Steven Mnuchin continued to negotiate and appeared to narrow their difference.

Chris Zaccarelli, chief investment officer of Independent Advisor Alliance said there were people in the market who were hoping against hope for a deal.

"I think it was pretty unrealistic to expect a compromise before the election," Zaccarelli was quoted in a report.

He added that he believes both Democrats and Republicans are more likely to become ingrained in their positions to appeal to their base voters.

The chief investment officer said the market could still be moved as hopes for a federal aid will wax and wane in the coming weeks.

However, he said that Trump's announcement might well call off, causing stocks trading in a narrow range amid uncertainty over the election results.

The president's tweet also caused shares of airlines to sway.

Shares of American Airlines dropped more than four percent, giving up early gains.

United Airlines' stock dropped more than three percent.

Shares of Boeing fell nearly seven percent. It was said to lower long-term estimates for aircraft sales.

The Democratic-led House recently passed a $2.2 trillion measure.

Republicans have said they favor a COVID-19 relief package with a price cap of $1 trillion.

The two sides are stuck over the amount of bonus unemployment benefits and the size of aid to state and local governments.

Powell earlier said that too little support would lead to a weak recovery, causing unnecessary hardship for households and businesses.

"Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth," Powell was quoted.

Powell said that the risk of overdoing it seemed, for now, to be smaller.

He said that another risk is that COVID-19 cases might rise to levels that more significantly limit economic activity.

He also mentioned the tragic effects on lives and well-being.

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