NEW YORK (Reuters) - Wall Street took a nosedive late in the session on Tuesday, reversing solid gains to close deep in negative territory after President Donald Trump announced he was calling off talks on coronavirus relief legislation until after the Nov. 3 election.

FILE PHOTO: The U.S. flag is seen outside of the New York Stock Exchange (NYSE) in New York City, U.S., September 21, 2020. REUTERS/Andrew Kelly

All three major U.S. stock indexes closed more than 1% lower.

The markets finally ran out of hope Speaker (Nancy) Pelosi and (Treasury) Secretary (Steven) Mnuchin would pull a rabbit out of a hat, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

Trumps announcement in a tweet came on the heels of U.S. Federal Reserve Chair Jerome Powells warning of dire economic repercussions if Congress failed to pass additional fiscal stimulus.

Powell called for Congress to act quickly and Trump effectively pulled the rug out from under that, said Oliver Pursche, president of Bronson Meadows Capital Management in Fairfield, Connecticut. Its troubling, given the statements Chairman Powell made earlier today.

In remarks delivered online to the National Association for Business Economics, Powell warned the U.S. economy could slip into a downward spiral if the coronavirus is not contained and Congress fails to deliver additional fiscal support to businesses and households.

The Dow Jones Industrial Average .DJI fell 375.88 points, or 1.34%, to 27,772.76, the S&P 500 .SPX lost 47.68 points, or 1.40%, to 3,360.95, and the Nasdaq Composite .IXIC dropped 177.88 points, or 1.57%, to 11,154.60.

The pan-European STOXX 600 index .STOXX rose 0.07% and MSCI's gauge of stocks across the globe shed 0.75%.

Crude prices extended gains, boosted by supply disruptions from approaching storms in the Gulf of Mexico and an ongoing oil worker strike in Norway.

U.S. crude futures settled at $40.67 per barrel, a gain of 3.7%, while Brent gained 3.29% on the day to settle $42.65 per barrel.

The dollar, essentially flat for much of the session, jumped against a basket of world currencies after Trumps tweet.

The dollar index .DXY rose 0.21%, with the euro EUR= down 0.27% to $1.1749.

The Japanese yen strengthened 0.14% versus the greenback at 105.62 per dollar, while Sterling GBP= was last trading at $1.2902, down 0.58% on the day.

U.S. Treasury yields dropped from four-month peaks after Trumps announcement.

Benchmark 10-year notes US10YT=RR last rose 5/32 in price to yield 0.7469%, from 0.762% late on Monday.

The 30-year bond US30YT=RR last rose 13/32 in price to yield 1.5501%, from 1.567% late on Monday.

Gold prices were lower after the safe-haven precious metal erased earlier gains.

Spot gold XAU= dropped 1.4% to $1,886.71 an ounce.

Reporting by Stephen Culp; additional reporting by Sinead Carew; Editing by Sonya Hepinstall

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