Political turmoil concerns and trade tensions have badly affected the stocks and they again took a dip on Thursday in Washington. After Wednesday’s rally which gave the largest percentage gains to Wall Street in almost a decade, the investors are again weighed down by the unending tensions and turmoil.
The Dow Jones Industrial Average decreased by 1.8% and around 400 points, after climbing 1,000 points and more. The Nasdaq Composite and the S&P 500 also fell by 1.7%. Even after the rise on Wednesday, several sell-offs helped to put the stocks back on track for their worst month since the time of the Great Depression.
FXTM research analyst Lukman Otunuga said,
Buying sentiment towards global entity markets skyrocketed yesterday due to an apparent return of risk appetite and rebounding oil prices. However, with geopolitical risk factors leaving global sentiment extremely fragile, the upside was poised to be limited.
Amazon and Apple both lost 2% and more as high flying technology companies rally reversed. Alphabet, Netflix and Facebook also fell by 1% and more. Oil also descended into bear market further and pared gains down around a third after the October highs.
Brent was trading at $54 per barrel and West Texas Intermediate at $45.40 per barrel. Congress was ready to reconvene on Thursday after the holiday break, partial government shutdown’s sixth day over border security funding.
However, the progress signs are elusive after President Donald Trump’s strengthened his demands for the long promised wall along the southern border. Brean Capital strategist Scott Buchta said that the nature and tone of the discourse out of Washington has caused a lot of uncertainty leading to increase in caution by the investors in the market.
Trump is also considering an executive order blocking the US companies from using China’s Huawei Technologies and ZTE. This could further stir tensions between the largest economies.
Source: Business Insider, The News Clue
