Stocks sink amid Gary Cohn's departure, tariff fears
The resignation of top White House economic adviser Gary Cohn is rattling investors, prompting a sell-off of global shares. U.S. stocks declined almost 1 percent in early trading on Wednesday.
Cohn is resigning after opposing President Donald Trump's decision to impose steep tariffs on imported steel and aluminum. Investors are rattled because his departure may signal Mr. Trump is moving forward with the tariffs, which some economists have warned could prompt a trade war and job losses in the U.S.
Cohn, who had served as Mr. Trump's top economic advisor for 14 months, was viewed as a pro-business and pro-trade voice in the White House. His departure will have the most impact on trade policy, noted Cowen analyst Jaret Seiberg in a Tuesday research note.
"Gary Cohn was the most important and powerful pragmatic, pro-business member of the President's inner circle," Seiberg wrote. "His departure gives conservatives and protectionists much more influence over White House policy."
Will be making a decision soon on the appointment of new Chief Economic Advisor. Many people wanting the job - will choose wisely!
— Donald J. Trump (@realDonaldTrump) March 7, 2018
The Dow Jones Industrial Average was down 133 points, or 0.5 percent, to 24,751 as of 11:07 a.m. Eastern time. The S&P 500 fell 10 points, or 0.4 percent, while the tech-heavy Nasdaq Composite traded largely flat. Global markets slipped, with France's CAC 40 falling 0.5 percent to 5,144.61 and Germany's DAX losing 0.4 percent to 12,069.84.
Asian markets started flat but losses widened in the afternoon. Japan's Nikkei 225 dropped 0.8 percent to 21,252.72 while South Korea's Kospi fell 0.4 percent to 2,401.82. Hong Kong's Hang Seng index sank 1 percent to 30,196.92 while the Shanghai Composite Index retreated 0.6 percent to 3,271.67. Australia's S&P/ASX 200 sank 1 percent to 5,902.00. Stocks in Southeast Asia were mostly lower.
"The sudden resignation of White House economic adviser Gary Cohn rattled markets," noted TD Securities analysts before the market opened.
They added, "The big decision came after Gary lost to the US administration on the steep tariffs on steel and aluminum. Right after his announcement, the White House announced that it is considering clamping down on Chinese investments in the US and imposing tariffs on a broad range of its imports."
The Associated Press contributed reporting.