Stock market investors across the world got a jolt from the sudden resignation of a key Trump adviser yesterday, prompting a drop on Wall Street and in Asia, although Europe regained its poise after an early slump.
London’s FTSE 100 gained 0.2% at 7,157.84 points, Frankfurt’s DAX 30 climbed 1.1% to 12,245.36 and Paris’s CAC 40 was up 0.3% to 5,187.83 points at the close of trading yesterday.
Gary Cohn’s abrupt decision to step down was seen as increasing the likelihood of Donald Trump provoking a trade war.
“US stocks are moving noticeably lower in early action, with lingering concerns about the global trade impact of President Donald Trump’s tariff plan being met with yesterday’s resignation of the White House’s top economic adviser Gary Cohn,” analysts at the Charles Schwab brokerage said.
Early excitement at North Korea’s offer of denuclearisation talks helped European market sentiment, dealers said, as did a gradual recovery of the dollar.
“Investors panicked in response to Gary Cohn’s unexpected – although not entirely surprising – announcement that he’s resigning from his post as Donald Trump’s top economic adviser,” said Fawad Razaqzada, analyst at Forex.com.
“The market’s reaction suggests investors are now even more concerned that with one of Trump administration’s strongest free trade advocates gone, that the US trade policy will head further into protectionist territory.”
Razaqzada wondered, however, whether markets were perhaps “overreacting” to the resignation.
Investors had already been on edge over expected US interest rate rises, and rattled further since the US President last week unveiled plans for controversial tariffs on steel and aluminium imports as part of his “America First” agenda.
International Monetary Fund chief Christine Lagarde yesterday warned that a trade war would snuff out global growth, and the EU published a list of products – ranging from peanut butter to motorcycles – that it would target with tariffs if Trump makes good on his threat.
Financial markets will meanwhile miss Cohn, who was once tipped as a possible choice to head the Federal Reserve, because they regarded him as their ally in the White House, analysts said.
“Cohn was seen as one of Wall Street’s guys and in his role as adviser to the president he was widely viewed as having the markets’ back,” said David Cheetham, chief market analyst at XTB.


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