Dow drops 200 points as White House chaos continues

  • Stocks fell Tuesday after President Donald Trump unexpectedly blocked the Broadcom-Qualcomm merger and ousted Secretary of State Rex Tillerson.
  • GE was the worst Dow Jones component, followed by Microsoft.

The Dow Jones industrial average dropped nearly 200 points, or 0.68%, Tuesday as Wall Street processed President Donald Trump’s blocking of Broadcom’s proposed takeover of a US competitor and a surprise change of the US’ top diplomat.

The S&P 500 fell 0.64% while the Nasdaq lost 1.02%.

The White House issued a highly unusual executive order blocking Broadcom’s $US117 billion offer to buy competing chipmaker Qualcomm on the grounds of national security. Shares declined 5% Tuesday alongside other tech names like Microsoft.

Trump unexpectedly ousted Secretary of State Rex Tillerson, announcing the change in an early morning tweet. Tillerson will be replaced with CIA Director Mike Pompeo in a highly unusual shakeup that appears to have left investors confused about the state of the West Wing.

GE took a major hit, ending the day as the worst performer of all Dow components. Shares slumped 4.4% after JPMorgan cut its price target for the industrial giant.

Elsewhere, US Steel slid more than 7% despite raising its guidance due to Trump’s new tariffs on imported steel and aluminium.

Earlier in the day, stocks seemed to largely shrug off an inflation reading that showed consumer prices rose 2.2% versus a year ago in February, in line with Wall Street expectations.

Crude oil slumped by 1.2%, to $US60.62 a barrel, while the yield on 10-year Treasury note fell 3 basis points to 2.87%.