Dow loses 370 points as US stocks suffer worst day of 2017
U.S. stocks slumped on Wednesday, as investors ditched risk assets amid concerns that President Trump’s economic agenda could be delayed amid rising U.S. political turmoil.
Investors fled risk assets, on the back of concerns that rising U.S. political turmoil could cause a delay to President Trump’s ability to deliver on his pro-growth economic agenda, which includes tax-reform and deregulation, widely seen as a boon for equities.
Financials, mainly banks, which had rallied on expectations of Trump’s pro-growth economic agenda were among the biggest laggards of the session, as Goldman Sachs Group Inc (NYSE:GS) closed more 5% lower.
The flight to safety trade continued throughout the session, as traditional safe-havens such as the U.S. 10-Year and Gold Futures grew in demand while the CBOE Volatility Index, referred to as the ‘fear index’, surged more than 20%.
Meanwhile, investors’ expectations dampened that the Federal Reserve would adopt an aggressive interest rate hike policy, after expectations for a June rate hike fell below 60%from 80% in the previous week.
In corporate earnings news, Cisco Systems Inc (NASDAQ:CSCO) reported fiscal third-quarter earnings, which beat on both the top and bottom lines.
The Dow Jones Industrial Average closed at 20,606.93, down 1.78%. The S&P 500 closed more than 1.5% lower while the Nasdaq Composite lost 2.5%.