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Wall Street extends market rout as Trump blames the Fed for steep sell-off

Trump says he will not fire the Fed chief, but legal experts doubt he can do so after he blamed it for the market's sell-off
Federal Reserve
Trump stated that the Fed has been “far too stringent far too fast"

Wall Street stocks endured another beating to end sharply lower on Thursday, extending the losses from a market rout that began in the previous session. 

President Donald Trump blamed the Dow’s steep drop on the Federal Reserve upping interest rates, saying that while Chairman Jerome Powell wouldn’t be fired, he believed the Fed has been “far too stringent far too fast.”

Legal experts said though that Trump can only fire Powell "for cause" and not over disagreements on monetary policy.

Market participants had pinned the blame on Trump's escalating trade war with China.

The Dow Jones Industrial Average fell another 545 points or by 2.1% to end at 25,052.

On Wednesday, the Dow saw its third biggest single-day point loss when it plunged 831 points. In two days, the index had fallen 1,376 points.

The S&P 500 was down 2.06% to close at 2,728.  

The Nasdaq retreated almost 93 points or by 1.25% to settle at 7,329. 

The Russell 2000 small-cap index fell around 1.9% to conclude at 1,545.

In Canada, the TSX declined 172 points or by 1.1% to trade around 15,344. 

12:15 PM: US stocks in the red this afternoon as Trump places the blame on the Federal Reserve

US benchmarks took a hit this afternoon following dramatic losses Wednesday.

President Donald Trump blamed the Dow’s drop on the Federal Reserve, saying that while Chairman Jay Powell wouldn’t be fired, he believed the Fed has been “far too stringent far too fast.”

Market analysts had credited the decliner to concerns over Trump’s trade war with China.

The Dow Jones Industrial Average fell about 120 points, weighed down by Pfizer Inc (NYSE:PFE), McDonald’s Corp (NYSE:MCD) and oil giants Chevron Corp (NYSE:CVX) and Exxon Mobil Corp (NYSE:XOM).

The S&P 500 was down about 16 points by midday. Construction company Fluor Corp (NASDAQ:FLR) was the worst-performing stock on the index, down nearly 16% to $47.27 after issuing disappointing preliminary third-quarter results.

The Nasdaq dropped 8 points, dragged lower by discount retailer Dollar Tree Inc (NASDAQ:DLTR) and drug manufacturer Mylan NV (NASDAQ;MYL)

The Russell 2000 small-cap index fell around 0.6%. Sears Holdings Corp (NASDAQ:SHLD) was a top decliner after reports that the retailer intends to file for bankruptcy.

Up north, the TSX saw a nearly 90-point drop over concerns about the US market and rising US Treasury yields.

10:00 AM: US stocks tumble at the open, but then rebound as market sentiment helped by soft inflation data

US stocks took another tumble at the open on Thursday, but then turned positive, as losses were kept in check by the publication of relatively soft inflation data.

US consumer price growth dipped last month as the data showed a year-over-year jump in core consumer prices of 2.2%, which missed forecasts and was weaker than the 2.3% predicted.

While sentiment was still being dragged back investors’ response to the finale of years of cheap money, after an initial dip, investors pushed stocks higher.

Early in the session, after sliding more than 150 points at the open, the Dow reversed course and added 30 points to hit 25,628, led by Nike Inc, Microsoft Corp, Intel, Home Depot, Caterpillar and Apple.

Elsewhere, the tech-laden Nasdaq also broke into an upward trot, climbing by 58 points to 7,480, lifted by ASML Holding NV, Seagate Technology PLC, JD.com, Illumina Inc, Adobe Inc and Analog Devices Inc.

Showing a more muted performance, the S&P 500 also added 8 points to hit 2,794 while the Russell 2000 index of small-cap stocks stayed in negative territory, losing 9.6 points to 1,564.

Up in Canada, Toronto’s TSX was also bucking the trend to stay negative, shedding 64 points to 15,452.

7:17 AM: Dow Jones Industrial Average set for further plunge as global investors flee from shares

Wall Street shares are expected to continue downwards on Thursday after the big sell-off Wednesday, which saw the Dow Jones Industrial Average post one of the biggest one-day losses ever.

Worries over the rising cost of debt and the Chinese economy are hammering global stock markets.

The Dow Jones sank over 831 points to 25,598, while the Nasdaq shed a whopping 315 points to 7,422.

Meanwhile, the broader-based S&P 500 index shed over 94 points at 2,785.

 

In US futures trade today, the Dow Jones has slipped a further 246 points, while the Nasdaq has lost 59.5 points and the S&P 500 dropped over 23 points.

 

In Europe, FTSE 100 at the time of writing, is down 133 points at 7,013, while the German DAX is down 177 points. The French CAC 40 is off around 90 points.

In Toronto, the TSX is down over 336 points at 15,517.

Connor Campbell, financial analyst at Spreadex in London, said: "With the prospect of another bloody US session on the horizon, the European losses ramped up to some truly ugly levels.

"At this point it appears that momentum – stemming not only from the various macro issues plaguing the markets, but the fact the Dow Jones was arguably overdue a correction – is playing a huge part in driving the global indices lower."

It comes ahead of the big bank earnings, which will start Friday. Economists say it could be the huge banks' most profitable third quarter since the meltdown a decade - ago but there are still underlying concerns about future growth.

Meanwhile, in  Asian markets overnight, the Nikkei 225 tanked over 915 points at 22,590, while the Shanghai Composite Index was also lower - down  142 points at 2,583.

 


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