Stocks fall as Democrats turn up heat on Trump
Stocks dropped on Wall Street on Tuesday as House Democrats met to consider a potential impeachment probe of President Donald Trump and a report showed a drop in consumer confidence.
After a higher open, stocks declined as the Conference Board, a business research group, reported its consumer confidence index fell to 125.1 in September. That’s worrisome because consumer spending has underpinned the economy during a slowdown in manufacturing.
The declines intensified after reports said a growing number of Democrats were in favor of launching an impeachment inquiry against the president and House Democrats were meeting to consider the possibility. Stocks recovered somewhat after Trump said he plans to release the full transcript of a July phone call with Ukraine’s president that is at the center of the impeachment discussions.
It was the market’s most volatile day this month. The Dow Jones Industrial Average swung from a gain of 130 points to a loss of around 245 points as investors’ attention swung between headlines on economics and politics. The index finished with a loss of 142 points.
“News of increased likelihood of impeachment proceedings has just added to this overall level of uncertainty that’s out there right now,” said Willie Delwiche, investment strategist at Baird.
House Speaker Nancy Pelosi announced Tuesday afternoon that the House is moving forward with an official impeachment inquiry after the market closed.
The swings in stocks Tuesday disrupted the relative calm that has distinguished the market in September. Traders sought safety — they piled into bonds, sending yields sharply lower. They also bid up utilities and household goods makers. All other sectors declined.
The S&P 500 index fell 25.18 points, or 0.8%, to 2,966.60. The benchmark index remains within 2% of its all-time high set in late July.
The Dow slid 142.22 points, or 0.5%, to 26,807.77. The Nasdaq lost 118.84 points, or 1.5%, to 7,993.63.
Traders also turned away from smaller company stocks. The Russell 2000 index gave up 24.64 points, or 1.6%, to 1,533.61.
Trade news was also in the mix Tuesday. Investors were optimistic after U.S. Treasury Secretary Steven Mnuchin confirmed that trade negotiations with China will resume the week of Oct. 7. But Trump dampened that sentiment with remarks before the U.N. General Assembly, where he underscored the need for a fair trade deal with China, threatening more tariffs.
“Trump’s speech to the U.N. did not seem conciliatory toward China,” Delwiche said. “The speech today didn’t suggest that there was anything imminent in terms of good news from a trade perspective.”
The market’s gains have become weaker as September nears its end. The S&P 500 notched a 2.8% gain the first week of the month, but is currently on track for a gain of 1.4%.