By Stephen Culp

NEW YORK, Oct 7 (Reuters)U.S. stocks rebounded to close sharply higher on Wednesday after incremental stimulus proposals helped investors recover from the shock of President Donald Trump’s announcement on Tuesday that he would halt stimulus talks until after the Nov. 3 election.

Increased risk appetite also resulted in weaker Treasury prices and a steepening yield curve as markets were heartened that at least some fiscal aid measures to help an economy battered by the coronavirus pandemic were still on the table.

While White House Chief of Staff Mark Meadows said he was “not optimistic for a comprehensive deal,” Trump appeared to relent somewhat, urging Congress to pass a $25 billion airline bailout, a move also supported by U.S. House of Representatives Speaker Nancy Pelosi.

In separate Twitter posts, Trump also expressed willingness to approve sending stand-alone $1,200 relief checks to Americans and urged Congress to approve the $135 billion payroll protection program for small businesses.

“Investors grow optimistic when there is any type of stimulus, whether it’s a large package or more discrete,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “There’s interest on both sides in having some kind of stimulus as the election approaches.”

“The most important issue for them is who gets to take credit for it,” Sroka added.

The U.S. Federal Reserve released the minutes from its latest monetary policy meeting, which revealed many members of the Federal Open Market Committee said their economic outlook assumed additional fiscal support, and if a stimulus package from Congress was too small or came later than expected, the economic recovery could be slower than anticipated.

This echoed Fed Chair Jerome Powell’s warning on Tuesday that the economic recovery would slip into a downward spiral if Congress fails to provide additional fiscal

By Stephen Culp

NEW YORK, Oct 7 (Reuters)U.S. stocks bounced back in a broad rally on Wednesday as investors recovered from the shock of President Donald Trump’s announcement that he intended to halt stimulus talks until after the election, and were relieved that pandemic relief could be passed incrementally.

The risk-on mood was also reflected in weaker Treasury prices and a steepening yield curve as markets were heartened that at least some fiscal aid measures were still on the table, a day after Trump’s tweet sent markets into a nosedive.

While White House chief of staff Mark Meadows said he was “not optimistic for a comprehensive deal,” Trump relented somewhat, urging Congress to pass a $25 billion airline bailout, a move also supported by U.S. House Speaker Nancy Pelosi.

In another tweet on Wednesday, Trump also urged Congress to approve the $135 billion payroll protection program for small businesses.

“If you can’t agree on an overall package but there are elements that you can agree on go ahead,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“Two elements that are needed are some kind of bailout for the airline industry, and additional aid to allow people to pay bills and buy groceries,” Tuz added. “Those are things that are unequivocal and agreed on by both sides.”

The U.S. Federal Reserve released the minutes from its latest monetary policy meeting, which revealed many members of the Federal Open Market Committee said their economic outlook assumed additional fiscal support, and if a stimulus package from Congress was too small or came later than expected, the economic recovery could be slower than anticipated.

This echoed Fed Chair Jerome Powell’s warning on Tuesday that the economic recovery would slip into a downward spiral if Congress fails to