A gauge of global stocks fell on Tuesday as calls for the impeachment of U.S. President Donald Trump grew louder, while the British pound firmed as the UK Supreme Court ruled Prime Minister Boris Johnson’s decision to suspend parliament was unlawful.
After initially advancing, Wall Street’s benchmark S&P 500 index retreated to session lows after U.S. Representative John Lewis, one of the most senior leaders, joined other Democratic lawmakers in calling for impeachment proceedings to begin against President Donald Trump.
The call came after Trump confirmed he held back aid to Ukraine but denied it was done to provoke an investigation of Democratic political rival Joe Biden, the former vice president. Biden was to deliver a statement calling for Trump’s impeachment later on Tuesday.
House of Representatives Speaker Nancy Pelosi, a Democrat, was to meet later on Tuesday with Democratic lawmakers to consider opening impeachment proceedings.
“They are taking a huge risk here, as are the Republicans, digging in on both sides - it is interesting to see how this is going to play out,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. “Is it good for the market? – Probably not.”
The Dow Jones Industrial Average fell 141.68 points, or 0.53 per cent, to 26,808.31, the S&P 500 lost 25.15 points, or 0.84 per cent, to 2,966.63 and the Nasdaq Composite dropped 118.84 points, or 1.46 per cent, to 7,993.63.
Canada’s main stock index also erased early gains on Tuesday, as BlackBerrys shares fell on weak results and a slide in oil prices capped gains.
The Toronto Stock Exchange’s S&P/TSX composite index was unofficially down 68.87 points, or 0.41 per cent, at 16,798.33.
BlackBerry’s shares fell 22.7 per cent, their biggest percentage drop since early 2015, after the company cut the top end of its revenue forecast for the current year, hit by weak demand for its software amid increasing competition.
The energy index dropped 1.9 per cent as oil prices fell on gloomy outlook for demand and the prospect of Saudi Arabia restoring oil output faster than anticipated following attacks last week.
Five of the 11 major sectors were higher, with a 0.8-per-cent rise in the consumer staples index leading the gainers.
Leading the index were Turquoise Hill Resources Ltd., up 6.3 per cent, OceanaGold Corp., up 5.8 per cent, and First Quantum Minerals Ltd., higher by 4.8 per cent.
Lagging shares included Cronos Group Inc., down 8.6 per cent, and Methanex Corp., lower by 7.4 per cent.
The tone of the market had begun to weaken earlier in the session, with gains evaporating after weak data on U.S. consumer confidence and a speech by Trump to the United Nations General Assembly that called on nations to embrace nationalism and turn their backs on globalism. Trump also issued a message to China that he will not accept a “bad deal” in trade negotiations.
Markets had been optimistic about the trade tone after U.S. Treasury Secretary Steven Mnuchin said on Monday that he and U.S. Trade Representative Robert Lighthizer would meet with Chinese Vice Premier Liu He for trade talks in two weeks, after waning optimism on trade had hit the stock market on Friday.
A report showed that U.S. consumer confidence fell by the most in nine months in September, far more than expected, as Americans’ economic outlooks darkened in the face of the U.S.-China trade war.
Investors have looked to U.S. consumer strength as a reason to be optimistic about the economy despite signs of weakness in other areas, such as manufacturing.
European shares closed near flat, as Brexit uncertainty and the U.S. consumer data helped fan persistent growth worries.
The pan-European STOXX 600 index rose 0.01 per cent and MSCI’s gauge of stocks across the globe shed 0.51 per cent.
Sterling gained after the court ruling against Johnson, but uncertainty over a possible general election and the eventual outcome of Britain’s impending exit from the European Union capped its rise.
Sterling was last trading at $1.2472, up 0.35 per cent on the day.
The dollar index, which measures the greenback against a basket of six major currencies, fell 0.22 per cent, with the euro up 0.19 per cent to $1.1012.
Benchmark 10-year U.S. Treasury notes last rose 15/32 in price to yield 1.6576 per cent, from 1.708 per cent late on Monday.
Oil prices plunged more than 2 per cent on Tuesday to their lowest since the Sept. 14 attacks on Saudi Arabia’s key oil facilities, after U.S. President Donald Trump rekindled fears the Sino-American trade conflict that has crimped energy demand is far from over.
In a United Nations address, Trump accused China of unfair trade practices, including “massive” market barriers, currency manipulation and intellectual property theft, a few days after officials from the world’s two largest oil-consuming economies held inconclusive trade talks in Washington.
“Hopefully we can reach an agreement that will be beneficial for both countries,” Trump said. “As I have made very clear, I will not accept a bad deal.”
Brent crude futures, the international standard, settled $1.67, or 2.6 per cent, lower at $63.10 a barrel, while West Texas Intermediate futures ended at $57.29 a barrel, down $1.35, or 2.3 per cent.
Trump “ratcheted up the U.S.-China trade war again,” said John Kilduff, a partner at Again Capital LLC in New York. “It wasn’t a constructive tone in trying to get that resolved, and we know how sensitive oil prices are to the back and forth.”
Reuters