U.S. equities and stock exchange traded funds stumbled as traders were reminded that politics can still affect market sentiment after President Donald Trump’s eldest son revealed possible Russian support during the election campaign.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA:SPY), iShares Core S&P 500 ETF (NYSEARCA:IVV) and Vanguard 500 Index (NYSEARCA:VOO), were 0.3% lower Tuesday.
Donald Trump Jr. was told a Russian prosecutor was offering incriminating information about Hillary Clinton as part of Russian government support, Reuters reports.
Trump Jr. then agreed to meet with the lawyer during the campaign after being promised information that could derail Clinton’s election bid.
The markets reacted by turning risk-off and shifting toward safe-haven assets.
“The more the market has to grapple with events with Washington, the more we’ll see a situation where the market eventually breaks its will,” Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co, told Bloomberg. “The selloff is less than 50 basis points, we don’t need to make a mountain out of a mole hill, but the market does signal that it pays a lot of attention to the news. It might take the market a few minutes to a few days to figure out how important the news is.”