U.S. stocks fell Wednesday as political uncertainty weighed on risk assets.
Meanwhile, gains in shares of Nike (NKE) following better-than-expected quarterly results helped offset some declines in the Dow.
Here were the main moves in the market, as of 10:03 a.m. ET:
S&P 500 (^GSPC): -0.35%, or 10.53 points
Dow (^DJI): +0.01%, or 2.78 points
Nasdaq (^IXIC): -0.47%, or 22.17 points
U.S. crude oil prices (CL=F): -2.67% to $55.76 per barrel
10-year Treasury yield (^TNX): +1.9 bps to 1.654%
Gold (GC=F): -0.27% to $1,536.00 per ounce
Tuesday after market hours, House Speaker Nancy Pelosi formally announced an impeachment inquiry of President Donald Trump. The inquiry was spurred by a whistleblower report that Trump pressured Ukraine’s President Volodymyr Zelensky to investigate potential 2020 presidential opponent Joe Biden and his son.
Meanwhile, Trump also confirmed Tuesday that he withheld military aid from Ukraine, but said that this was because of his view that the U.S. was contributing more to the country than were other European nations.
Trump said he authorized the release of the full, unredacted transcript of his call with Zelensky, which the White House released Wednesday morning. The whistleblower could testify before Congress as soon as this week, according to a Twitter post from House Intelligence Committee Chairman Adam Schiff Tuesday.
The overhang of a formal impeachment inquiry has injected further uncertainty into markets, contributing to the S&P 500’s steepest loss since August on Tuesday.
However, most have pointed out that the impeachment process could take months to unfold, and that the likelihood of it furthering past the Republican-majority Senate remains dubious.
“There is no change to overall investment recommendations, which are only moderately cyclical given previous geopolitical and now political constraints on the business and profit cycles,” JPMorgan analyst John Normand wrote in a note.
But that said, the impeachment inquiry also occurs within a “unique context” in global markets that “now includes four elements – global growth slowdown, classic late-cycle vulnerabilities, high market valuations but somewhat defensive investor positioning,” Normand added.
“It would be complacent to think that the impeachment process just adds another ring to the circus and will prove inconsequential for markets into 2020,” he said. He highlighted “wildcards” that have arisen as a result of the inquiry, including added uncertainty around U.S.-China trade and U.S.-Iran relations, as well as for the 2020 presidential and Senate elections.
History provides little indication as to the direction of the stock market amid a presidential impeachment inquiry. The two previous incidences – during the Nixon and Clinton administrations – yielded two different results.
“During the Nixon saga, stocks were already tumbling (of course, we were going into recession) and kept falling after the formal inquiry process started,” Neil Dutta, Renaissance Macro Research head of economics, wrote in an email. “During the Clinton impeachment process, markets exploded to the upside as the economy boomed. Perhaps these political events are eventually overwhelmed by the fundamentals?”
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
Read more from Emily:
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.
Read the latest stock and stock market news from Yahoo Finance
Read more from source here…