USA stocks tumble on Trump woes, Spain attack

The dollar fell against a basket of major currencies on Friday as continued uncertainty over the economic agenda of U.S. President Donald Trump pushed investors out of the greenback.

Amid the political fallout, rumors swirled that National Economic Council Chair Gary Cohn was considering stepping down after the president's statements on Charlottesville.

Mr. Cohn, who is Jewish, was reported to be "disgusted" on Tuesday by Mr. Trump's remarks about violence at a white nationalist rally in Charlottesville, Virginia.

Moreover, Cohn appears to be a stabilizing force inside the administration, and has reportedly been one of the main counterbalances to some of the more protectionist camps inside the White House.

US crude also lost 0.1 percent to $47.05 on Friday, surrendering some of Thursday's 0.7 percent gain, heading for a 3.6 percent weekly loss.

Rather than a single catalyst, a range of worries prompted investors to take profits, including the tense United States relationship with North Korea, the Barcelona attack and domestic turmoil.


Still, a dip in the stock market is a long time coming, said Christine Armstrong, executive director at Morgan Stanley, as stocks break record after record.

The S&P 500 posted its second steepest one-day decline this year, down 1.5pc to 2,430.01, while the Dow closed down 274 points to 21,750.73.

The pan-European FTSEurofirst 300 index lost 0.59 percent and MSCI's gauge of stocks across the globe shed 0.57 percent.

"Between the early rumors that [Gary] Cohn might resign, the drop in domestic equities and the Barcelona terror attacks that refocused investors on the geopolitical tensions there was ample fight-to-quality motivation", write BMO Capital Group's Ian Lyngen and Aaron Kohli, in their afternoon note.

The dollar index rose 0.2 percent, with the euro down 0.24 percent to $1.174, after hitting a three-week low.

"Given all of the bad news in the last week - the combination of North Korea, this whole civil unrest, the terrorist incidents in Barcelona - the fact that the market is really hanging in there is showing some pretty good resiliency", said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. That's the most since the two weeks before the election. The Dow is on pace for its largest two-week percentage decline since mid-September past year, while the Nasdaq is flirting with its longest weekly losing streak since May 2016, as it has fallen for four weeks in a row.


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