Wall Street’s main indexes were set for their worst day in more than three months on Monday, as President Donald Trump’s orders to curb travel and immigration from some countries sparked uncertainty. Trump on Friday signed executive orders to suspend travel to the United States from seven Muslim-majority countries on grounds of national security, while also banning refugees from Syria.
Thousands of people rallied in major U.S. cities and at airports in protest. Nike and Starbucks were among the companies that did not support the ban. “The market is reacting negatively right now because of the uncertainty that it creates,” said Robert Pavlik, chief market strategist at Boston Private Wealth. “If it can pull more Republicans off of the President’s following and maybe weaken his strength in Congress then you start to wonder about the other initiatives that may not get passed.”
U.S. equities hit record highs following Trump’s election in November, encouraged by his promise of tax cuts and simpler regulations. However, the potential risk of Trump’s protectionist policies and the lack of clarity since he took office have dampened the enthusiasm. The Dow, which soared 9.2 percent in the aftermath of Trump’s election, has managed to gain only 1 percent after his Jan. 20 inauguration. The CBOE Volatility index or Wall Street’s “fear gauge” surged 20 percent, its biggest rise since Sept. 9.
Trump also signed an executive order that would seek to pare back federal regulations by requiring agencies to cut two existing regulations for every new rule introduced.
At 10:58 a.m. ET (1558 GMT), the Dow Jones Industrial Average was down 208.27 points, or 1.04 percent, at 19,885.51.
The S&P 500 was down 25.15 points, or 1.1 percent, at 2,269.54 and the Nasdaq Composite was down 78.67 points, or 1.39 percent, at 5,582.12. Five of the nine declining sectors of the S&P 500, including financials and technology, were down more than 1 percent.
Utilities and consumer staples -considered defensive plays – were slightly higher.
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Facebook and Apple, which are scheduled to report earnings this week, were the top drags on the S&P 500. Other technology stocks trading lower included Alphabet and Microsoft. Airline stocks including American Airlines , United Continental and JetBlue were down between 3.3 percent and 6.2 percent. Declining issues outnumbered advancers on the NYSE by 2,318 to 510. On the Nasdaq, 2,304 issues fell and 437 advanced. The S&P 500 index showed two new 52-week highs and five new lows, while the Nasdaq recorded 29 new highs and 30 new lows.