US stocks sink during opening hour of trade

Haresh Menghani FXStreet

• Commodity downturn whacks investor sentiment.
• US tax bill uncertainty adds to the downward pressure.

Major US equity indices opened sharply lower on Wednesday amid mounting concerns over the progress of US tax overhaul legislation.

Worries over the long-awaited US tax reform bill were lingering on Wednesday and was pressuring stocks. Adding to this, a broad commodity downturn, especially a sharp slide in crude oil prices following IEA's gloomy demand outlook on Tuesday, further weighed on the mood and dented investors' appetite for perceived riskier assets such as equities.

Meanwhile, a flattening Treasury yield curve, indicating that the Fed might raise interest rates too much and hinder longer-term inflation/economic growth, was also seen concerning investors and gave the markets another reason to correct.

During the opening hour of trade, the Dow Jones Industrial Average tumbled over 150-points to 23,257, while the broader S&P 500 Index lost nearly 20-points to 2,559. Meanwhile, tech-heavy Nasdaq Composite was down around 60-points to 6,679.

On the economic data front, the US CPI edged up 0.1% in October, with the core CPI to 1.8% y-o-y. Another report showed, monthly retail sales unexpectedly rose in October.

• US: CPI for all items increases 0.1% in October as shelter index rises
• US: Retail and food services sales for Oct. 2017 were $486.6 billion, an increase of 0.2% from Sep.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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