Banks and other financial companies led U.S. stocks sharply lower in midday trading Wednesday as bond yields tumbled. Investors fretted that the latest turmoil in Washington could hinder President Donald Trump’s pro-business agenda. Technology and industrial stocks were among the big decliners, while real estate companies were up the most.
KEEPING SCORE: The Standard & Poor’s 500 index fell 26 points, or 1.1 percent, to 2,373 as of 12:12 p.m. Eastern Time. The Dow Jones industrial average slid 255 points, or 1.2 percent, to 20,724. The Nasdaq composite index gave up 99 points, or 1.6 percent, to 6,069. Small-company stocks fell more than the rest of the market. The Russell 2000 index sank 28 points, or 2.1 percent, to 1,366. Those companies would stand to benefit even more than large ones from corporate tax cuts Trump is proposing.
THE QUOTE: Investors are questioning whether or not President Donald Trump’s agenda can remain on track in light of the growing questions and allegations playing out in the media, said Quincy Krosby, market strategist at Prudential Financial.
“You could see gold was up, the dollar weakened and money went into the Treasury markets,” Krosby said. “As long as it seems as if the Trump agenda can be realized before the midterm election, it’s OK with the market, but once you introduce uncertainty into that trajectory, that’s something the market has to reassess.”
TRUMP JITTERS: A published report late Tuesday revealed that Trump allegedly made a personal appeal to now-fired FBI Director James Comey to drop the bureau’s investigation into former National Security Adviser Michael Flynn. The White House denied the report. Even so, the latest political drama unfolding in Washington weighed on markets, stoking concerns over how the potential fallout may affect the Trump administration’s ability to pass corporate tax cuts and other business-friendly reforms.