Wednesday’s sell-off on Wall Street was startling because it followed months of a steadily climbing, tranquil stock market.
Confidence in President Donald Trump’s agenda to stoke economic growth was questioned Wednesday, as stocks tumbled and the dollar weakened.
The sell-off was startling because it followed months of a steadily climbing, tranquil stock market, a rally that came to be known as the Trump bump. And domestic employment and corporate profits have been strong, usually a boon for stocks.
Yet investors, who have shrugged off previous turmoil in the Trump administration, were clearly rattled by the most recent episode. Some on Wall Street speculated about whether the White House’s pro-business pledges to cut taxes, lighten regulation and increase infrastructure would be thwarted by the growing tumult in Washington. Some bank analysts even discussed the probability of impeachment.
And at a gathering of big money managers in Las Vegas, the former chairman of the Federal Reserve, Ben Bernanke, said he was worried about the stability of Trump’s leadership.
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“I think it’s a reasonable concern, obviously,” Bernanke said. He later added that after years of a strong economy, statistically speaking, it was time for a slowdown. “Over the next four years,” he told an audience of hundreds of investors, “there is a pretty good chance we’ll have a downturn.”
The question is whether it began Wednesday.
The New York Times report Tuesday that Trump had asked James Comey, then the FBI director, to scuttle an investigation shook markets.
The benchmark Standard & Poor’s 500 index tumbled 43.64 points, or 1.8 percent, to 2,357.03 Wednesday, its sharpest decline since September. The Dow lost 372.82 points, or 1.8 percent, to 20,606.93 — its steepest slide since the election. And the Nasdaq composite index, coming off setting two consecutive record…