You are here
US: Stocks fall as Congress opens impeachment probe of Trump; pound gains
[NEW YORK] Wall Street stocks fell on Tuesday as congressional Democrats moved towards launching formal impeachment proceedings against President Donald Trump, while the British pound gained on a sweeping court ruling that dimmed the chances for a no-deal Brexit.
Major US indices had opened higher, but tumbled into the red following weak consumer confidence data that showed Trump's trade war with China and rising tariffs are undermining sentiment.
Worries about trade were amplified when Mr Trump, in a United Nations speech, adopted a hard line on China ahead of key trade talks next month.
The US president found himself on the defensive as Democratic leaders signaled they expect to launch an impeachment investigation.
After the market closed, House Democratic leader Nancy Pelosi announced a formal impeachment inquiry of Mr Trump.
Democrats accuse Mr Trump of an abuse of power in a reported attempt to pressure the newly installed president of Ukraine to open a corruption investigation into his lead challenger for the White House, Joe Biden, and Mr Biden's son Hunter.
Art Hogan, chief market strategist at National Securities, said the push towards impeachment added to investor unease.
"The market doesn't have a good template for what that means," Mr Hogan said.
"Anything that might make a dent in consumer confidence would be a negative."
Earlier, the British pound gained against the dollar and euro after Britain's Supreme Court ruled Prime Minister Boris Johnson's suspension of parliament was unlawful.
Delivering the unanimous verdict of 11 judges, Supreme Court president Brenda Hale said the decision "was unlawful... because it had the effect of frustrating or preventing the ability of parliament to carry out its constitutional functions".
The pound rallied as traders bet Britain would now more easily avoid a no-deal departure from the European Union on October 31, analysts said.
Mr Johnson, who took office on July 24, said he did not like the ruling but would go along with it.
Most members of the House of Commons oppose Johnson's threat to leave the EU next month even if he has not agreed exit terms with Brussels.
"Traders are wondering: 'What is next for UK politics?'" said CMC Markets analyst David Madden. "A general election seems like the next move."
Market.com analyst Neil Wilson said, "It's hard to see how this gets the UK and EU any closer to a deal that will be approved by MPs, but it does really deliver a massive blow to Boris Johnson."
"It's perhaps not fatal, but it's not going to make life any easier and we are now faced with significant uncertainty of a different hue," Mr Wilson said.