Wall Street’s most popular stock indices posted their largest single-day drop of the year Monday, as investors fretted about the potential impact of President Donald Trump’s executive order temporarily banning immigration from seven majority-Muslim countries identified by the administration as “sources of terror.”
The Dow Jones Industrial Average (DJI) fell 122.65 points, or more than half a percent, to close at 19,971. The broader S and P 500 (SPX) lost 13.8 points, also more than half a percent, to close at 2,280.89.
U.S. stock prices have rallied strongly since Trump won the White House in November, encouraged by the promise of tax cuts and fewer regulations. Monday’s decline comes as potential risks from Trump’s more controversial policies hammered airline stocks and raised Wall Street’s volatility index.
Stocks in American Airlines fell 4.4 percent. United Continental was down 3.6 percent. And Delta Airlines, which suffered a systems outage that grounded nearly 300 flights over the weekend, fell 4.1 percent.
Trump’s executive order Friday, which temporarily banned immigration from Syria, Iraq, Iran, Libya, Yemen, Somalia and Sudan, has created massive delays for legal residents and visa holders, and temporarily halted the entry of refugees from some of those countries.
Thousands of people descended on major U.S. cities and airports to protest the surprise presidential decree, dampening some of the enthusiasm for the Trump-inspired rally in equity markets.
“Investors focused on the pro-growth Trump proposals and not those detrimental to economic activity, like protectionism,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
Another analyst cited worries of expanded travel restrictions and even possible retaliation by countries affected by the bans.
“The concern is that [Trump’s] travel ban starts to encompass more countries or that there are more stringent restrictions on travel to the U.S.,” said Stifel analyst Joseph DeNardi.
The Dow broke through the symbolic threshold of 20,000 points last Wednesday and stayed above that mark until Tuesday.
Source: Voice of America