Losses accelerated for U.S. stocks amid a day of sharp volatility after President Donald Trump unveiled his tariffs on China, at the same time he is dealing with the departure of his chief legal eagle John Dowd.
With less than an hour in the session, the Dow Jones Industrial Average is off over 500 points.
While the big decline may be unnerving to investors, according to Sameer Samana, global equity and technical strategist at Wells Fargo Investment Institute, this is the volatility the bank was expecting.
“2017 was unusually calm, and we knew this calm wouldn’t last, Samana told FOX Business. “Eventually, the markets will go higher, but we will have more volatility,” he added.
Investors are also getting comfortable with the Federal Reserve’s move to raise its benchmark interest rate on Wednesday, as expected, while also maintaining its stance for three rate hikes in 2018. The Fed also said it is looking for three more rate hikes in 2019, up from its previous plan to raise rates twice.
Samana noted that lingering Fed concerns could also have played into the sell-off on Thursday, noting that “we can’t dismiss that we will have more rate hikes later.”
According to Trump, the tariffs on China could as high as $60 billion, while the United States Trade Representative and the president’s chief trade advisor, Peter Navarro, told reporters in a briefing that they will be $50 billion.
After the closing bell investors will listen for clues on the global economy and consumer spending when Nike releases its quarterly earnings.
