Markets reacted negatively to President-elect Donald Trump’s first press conference on Wednesday, Jan. 11, after his surprise victory last November, causing stock indices to erase their early morning gains.
The S&P 500 went from rising 0.54% in morning trading to a decline of 0.5% after President-elect Trump took the podium, although shares recovered slightly after the conference ended.
In a combative and tense showdown with reporters, the soon-to-be President dismissed recent accusations that he has deep ties to Russia and that Vladimir Putin may be blackmailing him.
President-elect Trump dismissed the unsubstantiated report, calling it “pathetic” and entirely false. Trump then shifted the discussion toward his key economic plans to increase infrastructure spending, forge “better deals” with foreign nations and encourage more domestic investment from American and international companies.
Since Trump’s victory over Hillary Clinton, markets have broadly supported Trump’s economic plans, with many analysts suggesting that Trump’s economic policies could drive economic growth higher. Earlier this week, the World Bank Organization upgraded its outlook for GDP growth around the world, citing Trump’s economic plans as a catalyst for a stronger world economy. (See Also: World Bank Optimistic on Global Growth.)
Today’s weaker response from equities markets may indicate growing impatience with Trump’s refusal to provide concrete details on his fiscal policy plans. With much uncertainty remaining around Trump’s tax and spending plans, some investors are growing increasingly concerned that expectations of stronger growth are already priced into stocks.
Technology was hit particularly hard by the vague details in today’s press conference. The Nasdaq 100 went from green to a 0.24% loss, leading the PowerShares QQQ ETF (QQQ) to its weakest session. Before today, QQQ has risen higher in every trading day of 2017, leading to a 3.5% year-to-date gain before falling in Wednesday morning trading.