Stocks lose early gains amid Trump proposal for payroll tax cut to help economy

Stocks rebounded briefly on Tuesday from historic losses a day earlier, as investors awaited the details of President Trump’s emergency plan to stimulate the economy with a payroll tax cut and other measures.

The Dow Jones Industrial Average rose more than 600 points, or more than 2.5%, in early trading after losing more than 2,000 points on Monday. The S&P 500 and the Nasdaq each were up about 2.5% in the first 15 minutes of trading.

The S&P 500 and the Nasdaq each were up about 2.5% in the first 15 minutes of trading before giving back those gains before noon.

Mr. Trump on Monday night proposed a series of legislative and executive actions to protect the economy and blunt the spread of the coronavirus outbreak. He called for a temporary payroll tax cut, expanded sick leave for workers affected by the virus, and aid for small businesses and industries such as airlines and cruise ships.

Treasury Secretary Steven T. Mnuchin was to meet with Senate Republicans on Tuesday to discuss details of an economic package. The president signed an $8.3 billion measure last week to speed up delivery of virus test kits and other aid to states.

The president is facing skepticism in his own party about the need for economic stimulus. Sen. John Kennedy, Louisiana Republican, told Fox News on Monday, “I’m not going to vote just for a bunch of bailouts to be voting for a bailout. I gotta be convinced, but I’m certainly willing to listen.”

Sen. Mike Braun, Indiana Republican, also said he doesn’t think a stimulus package is warranted, and Sen. John Cornyn, Texas Republican, has called the idea “premature.”

The stock-market drop on Monday reflected concern over oil prices falling due to a feud between Saudi Arabia and Russia, and worries about the impact of the coronavirus.

Democratic leaders say they’re not interested in cutting payroll taxes. House Speaker Nancy Pelosi told her troops in a letter Monday night that their proposal will include free testing for people showing symptoms of the virus; expanded unemployment insurance for people laid off due to the virus; paid sick leave for quarantined workers and parents of children whose schools are closed; and expanded food stamps.

Senate Minority leader Charles E. Schumer of New York said the president is “focused more on the stock market than the pandemic.”

“Unless you deal with the pandemic, the stock market’s going to keep getting worse, and worse and worse,” Mr. Schumer said. “Deal with the pandemic first and foremost.”

The president again called on the Federal Reserve on Tuesday to cut interest rates, after the central bank did lower rates by a half-percent last week in response to the coronavirus.

“Our pathetic, slow moving Federal Reserve, headed by Jay Powell, who raised rates too fast and lowered too late, should get our Fed Rate down to the levels of our competitor nations,” Mr. Trump tweeted. “They now have as much as a two point advantage, with even bigger currency help. Also, stimulate!”

Alfredo Ortiz, president and CEO of the conservative advocacy group Job Creators Network, called on Democrats to “drop their partisan swords and work with the president to preserve the economic gains made by small businesses during this recovery.”

“A payroll tax cut has had support in both parties for many years, it’s time to get it done,” Mr. Ortiz said.