US stocks slide as investors hope for stimulus ahead of Tuesday deadline

US stocks slide as investors hope for stimulus ahead of Tuesday deadline
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  • US stocks dipped as investors weighed hopes for a stimulus breakthrough against rising COVID-19 cases throughout the US.
  • House Speaker Nancy Pelosi expedited talks on Sunday, setting a 48-hour deadline for the White House and Democrats to reach a compromise.
  • Even if a deal is reached, it's set to die in the Senate as Republicans push a $500 billion measure. A vote on the smaller proposal is set to take place on Tuesday, and Senate Democrats will all but certainly block the bill.
  • The US notched its fifth-straight day of more than 50,000 new cases, reviving fears of new lockdowns and a hit to economic recovery.
  • Watch major indexes update live here.

US equities erased gains and traded lower on Monday as investors weighed hopes for new-term stimulus against renewed coronavirus concerns.

House Speaker Nancy Pelosi established a 48-hour deadline on Sunday for the White House and Democrats to reach a compromise on fresh fiscal relief. She and Treasury Secretary Steven Mnuchin held multiple talks over the weekend on a deal. While the White House hasn't yet officially upped its $1.8 trillion counteroffer to Pelosi's $2.2 trillion proposal, President Donald Trump repeated calls for a deal larger than the two options.

Here's where US indexes stood at 11:55 a.m. ET on Monday:
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Even if a deal is reached ahead of the Tuesday deadline, Senate Republicans will all but certainly kill the package. Senate Majority Leader Mitch McConnell plans to bring a $500 billion measure to a vote on Tuesday and continues to oppose any larger measure. Democrats are set to block the piecemeal bill, essentially leaving both parties stuck in attempts to pass their own packages.

Concerns around rising COVID-19 case counts throughout the US also weighed on valuations. Daily new cases surpassed 50,000 for five days in a row, reigniting fears of a second lockdown or stymied economic growth.
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Global cases tore above 40 million on Monday, further fueling anxiety around a prolonged economic slump.

Read more: Buy these 7 unheralded stocks right now for near-term upside of at least 25% as growth accelerates to a new level, RBC says The Monday slump follows a small rally that closed out last week. Stocks gained on Friday after retail sales beat expectations in September, signaling stronger-than-expected consumer spending trends heading into the holiday season. The University of Michigan's consumer sentiment gauge also beat estimates for a preliminary October reading, adding to hopes that the US economic recovery can continue without near-term fiscal support.
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Concho climbed after oil giant ConocoPhillips announced it will buy the firm in a $9.7 billion deal. The acquisition marks the first major oil-industry deal since its collapse at the start of the pandemic.

AMC Entertainment jumped after the theater chain announced it will reopen locations in New York and Long Island.

Tesla gained after Wedbush analysts raised their price target for the stock to $500, implying a 14% gain from Friday's close. The team praised the automaker's better-than-expected deliveries in the third quarter, adding Tesla is on track to hit 500,000 deliveries this year.
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Spot gold rose as much as 1% to $1,918.61 per ounce. Treasury yields climbed and the US dollar fell against major peers.

Oil futures climbed after an early decline. West Texas Intermediate crude rose as much as 0.8%, to $41.22 per barrel. Brent crude, oil's international benchmark, climbed 0.7%, to $43.23 per barrel, at intraday highs.
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Now read more markets coverage from Markets Insider and Business Insider:

'I'm extremely concerned': A former Goldman Sachs hedge-fund chief says a flood of troubling signals shows the stock market is teetering — and warns a small correction could soon morph into something much larger

'Not out of the woods': Here's what 5 top executives said last week about the prospect of more economic stimulus
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The US federal deficit surges to record $3.1 trillion for 2020 amid unprecedented stimulus spending

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