U.S. Equities Drop as Tech Declines After Fed; Trump in Focus

Mueller's Expanded Probe Eyes Trump on Flynn

U.S. stocks fell for a second session, after a report the probe into Russia’s interference in the 2016 election may include examining President Donald Trump’s conduct.

The S&P 500 dropped 0.7 percent at 9:50 a.m. in New York, while the Dow Jones Industrial Average declined 0.4 percent. Crude prices hovered below $45 a barrel after overnight losses. Stocks have gained in 2017 despite a slump in oil prices, after moving more in tandem with the asset last year.

  • Tech down 1.6% for biggest loss in index as all but 3 companies in the group decline
    • Tech accounting for 33% of early trading
    • AMD and Lam Research down at least 2.6% for worst laggards
  • Discretionary stocks and staples both down
  • Utility shares only group higher
  • 10-year Treasury yield up 3.5 bps
  • Volume in S&P 500 about at 30-day average
  • VIX up to 12
    • Special counsel Robert Mueller plans to interview two top U.S. intelligence officials about whether Trump sought their help to get the FBI to back off a related probe of his former national security adviser, according to three people familiar with the inquiry
    • The dollar rose, following the Federal Reserve’s hawkish tone yesterday. The central bank raised rates for the second time this year and Chair Janet Yellen suggested that weak readings of inflation won’t persist
    • Traders are pricing in a less than 50% chance of another rate increase until June 2018, for which the probability is 62%, Fed fund futures show
    • Factory output declined 0.4 percent (est. 0.1% gain) after a 1.1% jump that was the largest since February 2014
    • Initial jobless claims fell by 8k to 237k (forecast was 241k); close to 43-year-low of 227k
  • EARNINGS: none

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