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By Lucy Bayly
Wall Street traders were bracing themselves Wednesday for more volatility in markets, after a record plunge of 653 points on Monday saw the worst performance by the Dow Jones Industrial Average on Christmas Eve.
Ahead of Wednesday’s opening bell, the Dow was trading up by around 100 points, with the S&P 500 and the Nasdaq both in the green zone.
Markets have been skittish in recent weeks on mounting fears of a global economic slowdown. While those concerns have been increasingly reflected in the markets — the Dow is down 7 percent for the month and the S&P was on the precipice of a bear market — losses accelerated sharply last week after the Fed failed to acknowledge that it would slow its rate hike path for 2019.
Japan’s Nikkei index plunged into a bear market on Tuesday, falling 5 percent. Wednesday overseas trading saw a continuation of the sell-off, with investors uneasy about the government shutdown in the U.S., the standoff between President Donald Trump and the Federal Reserve, and increasing turmoil and staff turnover in the White House.
Markets in Britain, Germany, and France are still closed for the holiday and will reopen Thursday.
Trump has laid the blame for the recent Wall Street sell-off squarely on the shoulders of Fed Chairman Jerome Powell, a rebuke that has roiled markets and even prompted an eleventh-hour call to the nation’s top banks from Treasury Secretary Steven Mnuchin to confirm that markets can “continue to function properly” despite the mayhem.
However, that call, which a Treasury official said was meant to be “a reassuring step,” seems to have merely rolled eyes among the banking community, with some chief executives “totally baffled” by the “unnecessary” step, according to one report.
Rep. Maxine Waters, D-Calif., the ranking member of the House Financial Services Committee, described Trump’s maneuvers and Mnuchin’s recent actions as “erratic,” in a statement released on Monday, saying their moves were “creating uncertainty and instability in the markets.”
“It would be in our nation’s best interest if they stopped what they are doing,” she said.