 Happy Wednesday and welcome back to On The Money, a lottery-losing newsletter. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N. Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis. THE BIG DEAL--Dow, S&P turn negative for 2018 as stocks slide: Stocks fell sharply on Wednesday as growing Wall Street pessimism pulled two major U.S. indexes in negative territory for 2018. The Dow Jones Industrial Average lost 608 points Wednesday, a 2.4 percent drop that wiped out the index's gains on the year. Standard and Poor's 500 index fell 3.1 percent, also sliding below its 2018 open. The Nasdaq composite tanked 4.43 percent as a Silicon Valley sell-off brings the tech-heavy index deeper into a formal correction. U.S. stocks have slid throughout October as traders brace for higher interest rates, deepening trade tensions and moderating corporate earnings to slow the economy. I break down the latest market meltdown here.
The background: - This month, the Dow has dropped 7.1 percent, the S&P 500 has fallen 8.9 percent and Nasdaq has tumbled 11.7 percent, according to CNBC. A formal correction is considered a 10 percent drop from a stock or index's most recent peak.
- Trump, who frequently took credit for the rampant bull market, has raged in response to the recent downturn and blamed the Federal Reserve for spurring the correction.
- Investors have fled stocks partly because of rising interest rates, which raise borrowing costs and reduce profit margins, but the rising costs of Trump's trade war and gloomier projections for global growth have also spurred much of the sell-off, according to analysts. Several corporations reported higher input costs and lower expected profits due to tariffs.
What comes next: We've got two weeks until Election Day, and the stock market could play a major role in Trump's public statements and messaging ahead of the crucial midterms. The president takes market movements very personally and has a tendency to bash the Fed and Chairman Jerome Powell during sell-offs. The bank won't hike again until after the election, but Republicans could face challenges pitching the strong economy if Trump is railing about the market. LEADING THE DAY Waters among Dems targeted with potential explosives: Rep. Maxine Waters (D-Calif.) was among several current and former top Democratic officials to receive potential explosive devices in the mail Wednesday, including former Presidents Obama and Clinton and former Secretary of State Hillary Clinton. A package with an apparent explosive sent to Waters, the ranking Democrat on the House Financial Services Committee, was intercepted at a congressional mail-sorting facility before it could reach her office. Waters has been frequently attacked by President Trump after calling on Americans to confront administration officials in public over the White House family separation policy. We've got more on the stunning news here. Senate Finance chair sees Trump's new tax cut as 'highly unlikely' this year: Senate Finance Committee Chairman Orrin Hatch (R-Utah) said Wednesday that it's "highly unlikely" the Senate would vote by the end of the year on a new tax cut proposal teased by President Trump. "I think it can but it would take a real monumental effort to get it through, no question. But it's always taken a monumental effort, and a lot depends on the political climate and, as you know, I've seen miracles happen before," Hatch said, when asked if the floated tax proposal could pass. Pressed if thought there could be a vote during the lame-duck session, Hatch added: "You can't count out the Congress. …[But] it would be highly unlikely."
Background: Trump said earlier this week that he would push for a vote on a second round of tax cuts after the midterm elections that will include a 10-percent reduction for middle-class Americans. The Hill's Jordain Carney has more here. Conservative group: Kamala Harris tax credit plan would cost $2.7 trillion: Sen. Kamala Harris (D-Calif.)'s proposed new tax credit for lower- and middle-income taxpayers would make the federal tax code more progressive but lower federal revenue by $2.7 trillion over a decade, according to an analysis released Wednesday by the conservative-leaning Tax Foundation. Under Harris's proposal, families making under $100,000 would be eligible for a new refundable tax credit. The credit would be in the amount of up to $6,000, phasing out as income increases, and taxpayers could choose to receive it annually or in monthly installments. Harris, who is thought to be a possible 2020 presidential candidate, argues that the credit would help middle-class households who are struggling with increases in the cost of living while wages have been flat. She touted her proposal as she campaigned for Democrats in Iowa, home to the first-in-the-nation presidential caucuses. The Hill's Naomi Jagoda breaks it down here. Majority of Americans say their finances haven't improved since Trump election: A majority of Americans say that their financial situation has not improved since the 2016 election, according to a Bankrate survey released Wednesday. Of those surveyed, 17 percent said they were worse off now than two years ago and 45 percent said their situation has not changed. Thirty-eight percent of respondents said their finances have improved. Despite low unemployment numbers and rising job numbers, senior Bankrate analyst Mark Hamrick noted that economic improvements are not being felt by everyone. "Ultimately, a rising economic tide lifts many boats. It does not lift all of them," he said. GOOD TO KNOW - The Trump administration won't send a top U.S. official to a major Chinese investment conference next month as the two countries continue to battle over trade issues.
- Business owners said that economic growth is the most important issue going into the Nov. 6 midterm elections, according to a new survey by Paychex, a human resources provider.
- Bloomberg breaks down how tariffs bit into third quarter corporate profits and which companies are hurting the most.
- The World Trade Organization is scrambling to develop a plan for the biggest revamp in its 23-year history after Trump brought the world's top trade court to the brink of collapse, according to Reuters.
- Overseas investors, traders and central bankers are buying fewer Treasury bonds, a potential turning point for a $15 trillion market, according to the Wall Street Journal.
- Wells Fargo has placed two senior executives on indefinite leave due to ongoing reviews of its sales practices, the bank announced today.
ODDS AND ENDS - Two Democratic senators are questioning if Google violated a consent agreement with the Federal Trade Commission (FTC) in failing to disclose a software vulnerability that exposed the data of nearly half a million Google Plus users.
- The largest Democratic super PAC is launching national TV ads this week tying Republicans to recent comments Senate Majority Leader Mitch McConnell made about entitlement spending driving the national debt.
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