US stocks, already under pressure from the get-go on Monday, lurched lower following media reports Rod Rosenstein, the US deputy attorney-general, had resigned.
Mr Rosenstein verbally resigned to John Kelly, the White House chief of staff, Axios reported this morning citing sources with direct knowledge. The New York Times reported last week Mr Rosenstein had proposed invoking the 25th Amendment to remove Donald Trump from office and offered to secretly record meetings with the president. Mr Rosenstein has denied the report, calling it “facturally incorrect.”
The S&P 500 dropped as much as 0.6 per cent as news of Mr Rosenstein’s possible departure broke, having been down by 0.4 per cent beforehand. The benchmark steadied to be 0.5 per cent lower, eyeing a second consecutive day of declines from Thursday’s record closing high.
Monday marked the first day of trading under the S&P 500’s revamped classification system that has, primarily, redistributed a number of major tech companies such as Facebook and Alphabet to a rebranded communications services sector from information technology.
Energy, up 1.1 per cent, was the S&P 500’s best-performing sector after oil prices hit their highest in four years. Technology and healthcare, each up 0.1 per cent, were the only other sectors in the black, according to Thomson Reuters. Basic materials and consumer staples, each down about 1.3 per cent, and industrials, down 1.2 per cent, were the worst-performing groups.
The Dow Jones Industrial Average was down 0.6 per cent from Friday’s record closing high, while the Nasdaq Composite fell 0.4 per cent.
Government bonds reversed their morning rally, with the sell-off starting around the time the Rosenstein news broke. The yield on the benchmark 10-year US Treasury was up 1.3 basis points at 3.0814 per cent.
The dollar was weaker, as the British pound steadied from Friday’s shaky session as traders reacted to Theresa May’s comments on Brexit, and as Mario Draghi said the European Central Bank remained on track to dial down its crisis-era stimulus later this year. The DXY index, which tracks the US currency against a weighted basket of global peers such as the euro and pound, was down about ¼ of 1 per cent at 93.993.
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