One awful day ruins week for S&P 500 on Trump drama gets serious

The Trump trade had its first major test as investors sold down stocks at the fastest rate since before the election on Wednesday. It may not have broken the S&P 500’s momentum, but it certainly made a dent.

Investors navigated a swarm of headlines from the White House. The biggest revelation, reports that President Donald Trump asked former Federal Bureau of Investigation (FBI) Director James Comey to drop the bureau’s investigation into ties between the administration and Russia, sent markets reeling as the S&P 500 posted its worst day since September.

Yet stocks were quick to rebound with back-to-back advances that brought the weekly move in the benchmark gauge to just a 0.4 per cent dip. The Dow Jones Industrial average also declined, erasing 92 points to end the five days at 20,804.84.

The biggest gain came on Friday as Deputy Attorney General Rod Rosenstein said he thought Trump’s decision to fire Comey was the right call. The S&P 500 trimmed its gains following reports that investigators are focusing on a current White House official and that Trump told Russian diplomats that firing Comey relieved “great pressure” on him.

Industry groups that were the hallmark of the Trump bump were among the hardest hit, with financial shares the worst-performing sector, dropping 1 percent for the week. Industrial stocks lost 0.2 per cent.