The Dow flatlined on Wednesday as Wall Street held feverish debates about what Speaker Nancy Pelosi’s announcement that the House would launch an impeachment inquiry into President Trump means for the markets.
Elsewhere, Beijing criticized the US for treating China like a threat, vowing that it wasn’t playing an insidious “Game of Thrones on the international stage.”
Wall Street’s major indices lurched sideways during the morning session. The Dow Jones Industrial Average gained 76.49 points or 0.29%. The DJIA last traded at 26,884.26.
The S&P 500 ticked up 2.67 points or 0.09% to 2,969.31. Seven of 11 primary sectors reported gains.
The Nasdaq crawled 5.31 points or 0.07% higher to 7,998.94.
More than two years into his presidency, “Trump’s Watergate” has now arrived. Following yesterday’s launch of a formal inquiry into his behavior in office, Trump becomes just the fourth president to encounter a realistic impeachment threat.
Analysts say that a successful impeachment remains a longshot, but the uncertainty could exact a price from the market nonetheless – at least in the short-term.
On the other hand, many market strategists predict that Wall Street will quickly come to view it as political theater.
“I think impeachment doesn’t hurt Trump. Once the market thinks about it, it’s just a side show. Mitch McConnell and his crowd would not impeach Trump,” Tom Block, Fundstrat Washington policy strategist, said in remarks cited by CNBC.
That said, impeachment does present two threats to the Dow and its peers.
First, a drawn-out fight could cause Capitol Hill’s legislative gears to grind to a halt, preventing the passage of market-friendly actions such as the ratification of the US-Mexico-Canada (USMCA) trade agreement.
Second, it could hinder the US-China trade talks, both by distracting the Trump administration and giving Beijing leverage over a president who might need a substantial victory to bolster his reelection fight.
The US and China plan to hold a new round of top-level negotiations in approximately two weeks, and Beijing says the US must dial back its hostility for the two sides to achieve progress.
Speaking on Tuesday during his visit to New York for the United Nations General Assembly, Chinese Foreign Minister Wang Yi warned that US-China relations sit at a crucial “crossroads” and that it’s incumbent on Washington to stop treating China like a threat.
“China has no intention to play Game of Thrones on the international stage,” Wang said.
Wang also said that the US should adopt a similar posture, likely referring to the ongoing protest movement in Hong Kong. Increasingly, both Chinese officials and state media outlets have accused the US of improperly intervening in the conflict in a bid to destabilize China and subvert the Communist Party’s power.
“China will maintain its strategic focus and cultural confidence and will not be swayed by others,” Wang said. “We hope the US will be consistent in respecting China’s sovereignty.”
Wang’s remarks came after President Trump forcefully defended Hong Kong at the United Nations on Tuesday, warning that how Beijing handles the situation “will say a great deal about its role in the world in the future.”
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Last modified: September 23, 2020 1:03 PM