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Wall Street drops in volatile trade on Trump impeachment call

NEW YORK (Reuters) – U.S. stocks were down sharply in volatile trading on Tuesday as a push by some Democrats for the impeachment of U.S. President Donald Trump gained momentum.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 23, 2019. REUTERS/Brendan McDermid

The Washington Post reported that Democratic House Speaker Nancy Pelosi would announce a formal impeachment inquiry of Trump, a Republican, later on Tuesday.

Support amongst Democrats for the start of impeachment proceedings increased after news that Trump may have sought foreign help in smearing a political rival.

Stocks briefly pared losses after Trump, in a tweet, said his administration would release a complete transcript of a call with Ukrainian President Volodymyr Zelenskiy that is at the center of the controversy.

He said the released transcript would show the call was “totally appropriate” and that he had not pressured Zelenskiy to investigate Democratic presidential hopeful Joe Biden and that there had been no quid pro quo for U.S. aid in exchange for a probe.

“What all of that combined is going to do is ensure there is going to be elevated volatility in both directions in the next few days,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

At 3:12 p.m. ET, the Dow Jones Industrial Average .DJI fell 128.9 points, or 0.48%, to 26,821.09, the S&P 500 .SPX lost 22.09 points, or 0.74%, to 2,969.69 and the Nasdaq Composite .IXIC dropped 107.05 points, or 1.32%, to 8,005.41.

Wall Street’s major indexes lost their footing earlier in the day when Trump took a harsh tone about China’s trade practices, while disappointing consumer confidence data raised concerns over the economic impact of a prolonged U.S.-China trade war.

Nike Inc (NKE.N) slipped 0.6%, ahead of the world’s largest sportswear maker’s first-quarter results after the bell.

Declining issues outnumbered advancing ones on the NYSE by a 2.10-to-1 ratio; on Nasdaq, a 3.14-to-1 ratio favored decliners.

The S&P 500 posted 31 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 36 new highs and 89 new lows.

Additional reporting by Ambar Warrick, Arjun Panchadar and Medha Singh in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta

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