May 17 (UPI) — Responding to the political tumult in Washington, Wall Street ended Wednesday sharply lower while the dollar’s value plummeted.
The Dow Jones Industrial Average dropped 368 points, or 1.8 percent of its total value, to 20,611 — the worst single day showing since September. The ICE Dollar Index, a leading indicator of currency valuation, showed the dollar’s value dropping far enough to erase the entire rally it’s seen since Donald Trump‘s election victory in November.
In response, traditionally safer assets rallied as investors sought shelter from the political headwinds surrounding Trump and what many on Wall Street hoped would be the swift implementation of the Republican Party’s business-friendly tax cuts.
The benchmark 10-year U.S. Treasury bond rallied, dropping its yield to 2.21 percent. Gold also shot up 1.8 percent, to $1,259.00 an ounce.
The one-day slump came as bad news mounted for Trump’s administration. On Monday, it was reported Trump may have passed highly sensitive intelligence on the Islamic State to the Russians during an Oval Office meeting. On Tuesday, news broke that, prior to firing FBI Director James Comey, Trump asked him to stop the investigation into former national security adviser Michael Flynn. Democrats have intensified calls for an independent investigation of Trump’s Russia ties and one House Republican said Trump’s attempt to pressure Comey could constitute an impeachable offense.
Few analysts on Wall Street said such an outcome was likely, but the wave of problems facing Trump could spell trouble for enacting his pro-business economic policies.
“The bigger picture here is it puts another dent in the likelihood of getting a congressional majority to pass Trump’s agenda,” R.J. Grant, director of equity trading at KBW Inc., told The Wall Street Journal.
Wednesday’s drop ended an unusually long period of stability in stocks. The S&P 500 had failed to move more than a half-percent in 1 consecutive trading sessions, the longest such streak since 1969.
International stock exchanges showed similar sell-offs. Stoxx Europe 600 dropped 1.2 percent and Japan’s Nikkei Index saw its largest single-day drop in a month.