US stocks fall sharply on Trump woes; Dow -1.8%

US stocks fall sharply on Trump woes; Dow -1.8%

Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK: Wall Street stocks fell sharply on Wednesday (May 17) on deepening worries about President Donald Trump's economic agenda following a series of scandals and stumbles.

The Dow Jones Industrial Average dropped 372.82 points (1.78 per cent) to 20,606.93 - its biggest one-day decline since Trump was elected.

The broad-based S&P 500 fell 43.64 points (1.82 per cent) to 2,357.03, while the tech-rich Nasdaq Composite Index tumbled 158.63 points (2.57 per cent) to 6,011.24, retreating from a record.

The losses followed reports that Trump asked former FBI chief James Comey to stop a probe into ex-national security advisor Michael Flynn over his contacts with Russia - a request which commentators said could amount to obstruction of justice.

The Comey revelations came on the heels of widespread criticism of Trump for allegedly disclosing highly sensitive intelligence to Russian officials last week.

Expectations about tax cuts and other key Trump growth agenda items have "meaningfully changed" in the wake of the negative stories, said Alexander Kazan, managing director of global strategy and analytics, Eurasia Group.

"You have much more of a sense of uncertainty about the future of the Republican agenda in Congress."

Analysts noted that US stocks remained near all-time highs following strong corporate earnings and better economic data, meaning that some of Wednesday's selling was due to profit taking.

"It's not necessarily panic selling mode. The market made a move to adjust for the risk premium now," said Victor Jones, director of trading at TD Ameritrade. "The concern is really the ability for the administration to drive the larger tax agenda."

Banking shares were among the hardest hit, with Bank of America losing 5.9 per cent, Goldman Sachs 5.3 per cent and JPMorgan Chase 3.8 per cent.

Technology shares, which have generally outperformed the broader market, also were weak. Apple, Facebook, Expedia and Netflix all lost at least three per cent. 

Source: AFP/de