U.S. equities and stock exchange traded funds pared early morning losses Friday, following reports that President Donald Trump removed the controversial chief strategist Steve Bannon.
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 0.1% higher Friday.
“I think it was the rumor of Steve Bannon getting fired,” Peter Costa, president of Empire Executions,” told Reuters. “There’s a lot of hopeful people thinking that, ‘you know what, he has been a divisive figure in the White House … Getting rid of him might be a good deal for the president.'”
Bannon who is known as an economic nationalist and advocate of the so-called America First policies left his position Friday as the newly hired Chief of Staff John Kelly sought to bring stability to an administration rife with infighting, the Wall Street Journal reports.
White House press secretary Sarah Huckabee Sanders said in a statement Friday, “White House Chief of Staff John Kelly and Steve Bannon have mutually agreed today would be Steve’s last day. We are grateful for his service and wish him the best.”
Observers have grown wary of Bannon’s position in the White House, especially as critics accused him of harboring anti-Semitic and white nationalist leanings.
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Market watchers may be relieved by Bannon’s dismissal, interpreting it as a sign of President Donald Trump’s way of distancing himself from white nationalism after his comments on Saturday’s violence in Charlottesville, Virginia.
Traders anticipate that stability in the administration’s team could further streamline Trump’s attempts to push through pro-growth policies, such as tax cuts, deregulation and increased fiscal spending.
“Picking fights and getting criticized by members of one’s own party don’t help in pursuing one’s agenda,” Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a note, according to Bloomberg.
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