By CCN.com: Friday was one of those days where headline news scared the heck out of investors, and the stock market’s “fear gauge” proves it.
The Cboe Volatility Index, or VIX, soared nearly 20%, peaking at 21.07 before settling down to 19.87 by the closing bell.
Fear started gripping investors early Friday morning when China retaliated against the U.S. by imposing its own set of new tariffs on American goods worth roughly $75 billion.
Investors were served another blow when Federal Reserve Chair Jay Powell stopped short of specifying any future interest rate cuts during his speech at Jackson Hole. Key points hit upon by the chair included:
“Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States,” Powell said.
Trump appointed Powell in February 2018. He’s hounded him relentlessly over interest rates since Powell voted with fellow Fed members to hike rates in 2018.
In tweets that left stock market investors and observers reeling, Trump went after Powell with attacks that seemed excessive – even for the president.
One even said that the U.S. Fed chair was just as much of an “enemy” as Chinese President Xi Jinping.
Saying the Fed “did nothing” left some to wonder if the president understood that Powell was not giving a policy speech today. He spoke at Jackson Hole, an economic symposium.
That tweet set the stage for the stock market’s tumble. The Dow Jones Industrial Average, S&P 500, and Nasdaq closed down 2.37%, 2.59%, and 3.00%, respectively.
Investors shouldn’t look for any relief on the trade war front coming soon. Following the closing bell, Trump confirmed Wall Street’s worst fear by tweeting that he will raise tariffs on even more Chinese goods.
Click here for a real-time Dow Jones Industrial Average chart.
Last modified: June 23, 2020 2:35 PM UTC