Dow falls more than 300 points on Trump woes

President Trump has not been leading the debate on tax reform; House Speaker Paul RyanPaul RyanThe Hill's 12:30 Report Rattled investors overreact to Trump turmoil in market sell-off Dems: Trump budget is recipe for shutdown MORE (R-Wis.) has, and he is facing opposition in his own party. The divergence between low volatility in the markets and high volatility in Washington "is unlikely to last very long", he added. The Nasdaq Composite (COMP) and S&P 500 Index ( SPX ) followed the Dow deep into the red, with financial stocks in particular suffering heavy losses.

The S&P 500 posted 11 new 52-week highs and 19 new lows; the Nasdaq Composite recorded 28 new highs and 93 new lows.

The four major banks were a drag, especially Westpac, which fell 3.8 per cent, mainly because it went ex-dividend from today.

The latest scandal is over whether Donald Trump asked the then FBI director James Comey to stop an investigation into his then national security advisor Michael Flynn.

The foreign exchange and bond markets have reflected skepticism over Mr. Trump's ability to boost USA economic growth for some time.

He will have broad powers to investigate allegations Russian Federation and Trump's campaign collaborated to influence the election past year and to prosecute any crime he uncovers.

The 10-year Treasury yield sank to 2.22 percent in its steepest decline since July.

"The Trump economic programme is either going to be delayed by this turn of events or possibly be derailed, that's why investors are acting the way they are".

It's always easy to blame what's happening in financial markets on the biggest headline of the day.

The VIX index, a measure of how much volatility investors expect in stocks, rose to its highest level since April 13. Banks were among the biggest losers Wednesday.

Falling bond yields mean lower interest rates on loans and tighter profits for banks. Bank of America slid $1.28, or 5.3 percent, to $22.71.

The latest headlines ratcheted up the market's unease.

The stock traded 1.9% higher at $US55.58 after rising as high as $US56.97 earlier in the day.

OIL: Benchmark U.S. crude rose 41 cents, or 0.8 percent, to close at $49.07 per barrel in NY. Brent crude, used to price global oils, fell 19 cents to $52.02 a barrel in London.

European equities also fell, with the French Cac 40 and German Dax down by around 1% and 0.9% respectively. Treasury bonds were little changed, the dollar was mostly stronger, gold lost 0.5% snapping a six-day winning streak and oil gained 0.6%.

Heating oil rose two cents to 1.53 dollars per gallon. Silver added 16 cents to $16.85 per ounce.

A man looks at an electronic board showing Japanese yen-U.S. dollar daily exchange rate at a securities firm Thursday, May 18, 2017, in Tokyo.

The S&P 500 was also tracking towards the biggest one-day drop in more than seven months.

Australia's S&P/ASX 200 lost 1.21 percent. Nearly all of the action is a result of 59,010 June 4 puts being bought to open for an initial cash outlay of $767,130 (number of contracts * $0.13 premium paid * 100 shares per contract).

In Japan, the Nikkei 225 dropped 1.81%, weighed by a surge in the safe-haven yen.

Hong Kong's Hang Seng Index was down 0.56%.

  • Zachary Reyes