The Dow Jones Industrial Average rebounded 500 points Wednesday after the markets took the worst Christmas Eve plunge in history.
The Dow rose more than two per cent, while the S&P 500 and technology-heavy Nasdaq Composite also rebounded with each gaining one gaining about one per cent percent Wednesday morning.
White House economic adviser Kevin Hassett did his best to calm the markets, reassuring reporters on Wednesday that Federal Reserve Chairman Jerome H. Powell’s job is ‘100 percent safe,’ according to the Washington Post.
‘Yes, of course, 100 percent,’ said Hassett, the chairman of the president’s Council of Economic Advisers, when asked by reporters at the White House if Powell’s job is safe. ‘Absolutely.’
He also said during an interview with Fox Business that President Trump is ‘very happy’ with Treasury Secretary Steven Mnuchin.
Scroll for video
Dow Jones plummeted throughout the month of December, and it took the biggest hit on Christmas Eve. One the first day of trading after the holiday the Dow climbed 500 points
The markets’ volatility has been fueled by political and economic developments including concern that Trump is unhappy with Treasury Secretary Steven Mnuchin (right) as well as with Federal Reserve Chairman Jerome H. Powell after an interest rate hike
During a call last week, Mnuchin added to the financial anxiety when he called chief executives of U.S. banks regarding the economy and then issued a statement saying, ‘The banks all confirmed ample liquidity is available for lending to consumer and business markets.’
That call and statement was criticized by some market watchers.
‘This call was absolutely unnecessary and in terms of their ability to communicate to the markets, they’re losing it,’ Frank Troise, managing director at SoHo Capital, told CNBC’s ‘Squawk Box’ on Wednesday.
Troise said the call was disconcerting and he wondered if Mnuchin has ‘no idea what he’s doing’ or if ‘there actually is a liquidity crisis.’
‘The concern now in the market is actually that Treasury’s out of touch with what’s going on,’ he added.
President Trump also tried to move the meter on the markets on Christmas Day when he said the pullback in stocks is a good opportunity for investors.
A look at the last 30 days shows the massive dip the Dow took on Christmas Eve before it rebounded 500 points during Wednesday morning trading
‘We have companies, the greatest in the world, and they’re doing really well,’ Trump told reporters at the White House.
‘They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.’
Investors are reeling from various economic and political shakeups including the partial federal government shutdown, an interest rate hike, and concerns over whether the president plans to fire Powell, not to mention the worrying call from Mnuchin to the banks.
‘The problem is Trump continues to create a lot of uncertainty,’ said Peter Cardillo, chief market economist at Spartan Capital Securities to CBNC. ‘We can’t focus on the fact there are a lot of good bargains out there.’
A headline appears on a television screen on the floor of the New York Stock Exchange, Wednesday. Stocks are opening strongly higher on Wall Street Wednesday,
University of Wisconsin football Team Captain Alec Ingold, second from right, and University of Miami football Team Captain Jaquan Johnson, right, ring the New York Stock Exchange opening bell, Wednesday
Big retailers were among the gainers. Amazon climbed 2.2 percent to $1,373.79. Kohl’s gained 4.3 percent to $62.36. Nordstrom picked up 2.9 percent to $45.45.
However, banks and other financial stocks took some of the heaviest losses Wednesday. Goldman Sachs Group lost 1.6 per cent to $153.81.
Homebuilders declined after a key index of U.S. home values showed annual price growth slowed in October.
Home price gains have been declining since early this year as would-be buyers struggle to afford homes in the face of rising mortgage rates. William Lyon Homes slid 4 per cent to $9.91.
The partial U.S. government shutdown that started Saturday is unlikely to hurt the economy much, although it may deprive the financial markets of data about international trade and gross domestic product.
The Bureau of Economic Analysis said Wednesday that it’s required to suspend all operations until Congress approves funding, which means that the government might not release its fourth-quarter report on gross domestic product as scheduled for January 30.