Now Wall Street’s worried about real war
First it was trade wars, now it’s real wars.
The Dow dropped 219 points on Wednesday on concerns about President Trump’s threats to Russia about an airstrike in Syria. Trump warned Russia in a tweet that it should “get ready,” because bombings “are coming” to Syria.
The S&P 500 and Nasdaq fell about 0.5% apiece.
“Our president is back on the tweet cycle again,” said Bruce McCain, chief investment strategist at Key Private Bank. “The big concern, much like the tariff issue, is: Does this broaden into something nastier? Will Russia somehow retaliate and drag us into something more?”
Worries about a conflict in the Middle East rattled the oil market as well. Crude oil prices jumped 2% and topped $67 per barrel for the first time since late 2014. The jump reflected concerns about Syria and a report from Saudi Arabia that it had intercepted missiles headed toward its capital.
Dow futures were already slightly lower before Trump’s tweet. The Wall Street Journal reported overnight that the Trump administration is pressing allies to back a military strike on Syria. The White House said on Tuesday that Trump canceled a planned trip to South America to remain in the United States to “oversee the American response to Syria.”
Meanwhile, the investigation into the president’s personal lawyer Michael Cohen has intensified in recent days. Stocks had rallied Wednesday as trade war fears eased.
“From inflation, to higher rates, to technology worries, to trade wars, the list of worries over the past two months is quite long,” said Ryan Detrick, senior market strategist at LPL Financial.
The Dow has tumbled about 9% from all-time highs in late January. Bullish investors hope the sell-off will ease as Wall Street shifts focus to what should be robust corporate earnings in the coming weeks.
” At the end of the day,” Detrick said, “the economy continues to support growth and that is what will matter to long-term investors.”