Dow Jones Drops By 300 Points As Trump Remains Embroiled In Controversy
ARI SHAPIRO, HOST:
Washington's political turmoil spilled over into the financial markets today. The Dow Jones industrial average fell 372 points, about 1.7 percent. The tech-heavy Nasdaq index was down more than 2.5 percent. NPR's Yuki Noguchi reports that investors are concerned President Trump's pro-growth agenda is now in jeopardy.
YUKI NOGUCHI, BYLINE: As questions swirl about what the president said to Comey before he was fired, those on Wall Street now apparently figure that Washington will be tied up in investigating instead of legislating. And that also means that some of the big items on the president's agenda, most notably tax cuts, are likely to fall away as a priority. Aron Szapiro is director of policy research at the investment analysis firm Morningstar.
ARON SZAPIRO: All these things take time, and these investigations are going to eat up a lot of it.
NOGUCHI: Szapiro says a big drop is scary but not necessarily game changing. He says politics has always been unpredictable. And tax reform, even without scandal, would have been a difficult feat for the administration to pull off.
SZAPIRO: They're tough choices. They're difficult conversations. And there's just a lot of work that has to go into it.
NOGUCHI: The surprise victory of Trump in November had ushered in a long market rally that sent the Dow and other stock indices into record territory. Bank stocks in particular rallied, as did the stocks of industrial companies on pledges of rolling back financial regulation and big boosts in infrastructure spending. Those sectors were particularly hard hit today. David Kretzmann is an analyst with the personal finance firm Motley Fool.
DAVID KRETZMANN: I don't think it's a surprise that financials and industrials are getting hit harder today than most, but the sell-off today really is across the board.
NOGUCHI: But, Kretzmann says, don't forget that stocks are still in a bull market.
KRETZMANN: We're just back to where we were at the end of April. You know, so it's not like the sky is falling. No one was worried about the world ending in April. They have to keep these things in perspective. The S&P 500 is still up over 5 percent for the year. It's up over 15 percent over the past year.
NOGUCHI: He says he's advising clients to diversify their stock portfolios to balance out the political volatility and let them ride out any scandal that might befall Washington. Yuki Noguchi, NPR News, Washington.