stock markets

US stocks tumble again while pound falls on Brexit uncertainty

Agence France-Presse, Agence France-Presse
US stocks tumble again while pound falls on Brexit uncertainty

The New York Stock Exchange stands in lower Manhattan in New York City on September 2, 2020. The Dow gained 454.84 points, or 1.59 percent, to close at 29,100.50. Closing less than 2 percent from an all-time high, the Dow posted its best rally since mid-July and closed. Spencer Platt/Getty Images/AFP

The Nasdaq, Dow, S&P 500, and European bourses all end down on Tuesday, September 8. The pound also slumps over heightened Brexit tensions.

United States stocks dove Tuesday, September 8, along with oil prices and the pound as markets mulled heightened Brexit tension amid lackluster economic outlook that has dented petroleum demand.

High-flying tech shares were again among the big losers on Wall Street, but the US sell-off broadened and also hit energy and financial companies.

Jack Ablin, chief investment officer at Cresset Capital, said Tuesday’s session marked a shift from the dynamic late last week in that the selling went far beyond the tech shares.

“Investors aren’t just shifting their deck chairs around,” Ablin said. “They’re worried about a recovery that’s not gaining strength.”

Unlike last week, US Treasury yields fell on Tuesday, while oil prices fell sharply, also indicators of the rising concern, Ablin said.

With Tuesday’s rout, the tech-rich Nasdaq has now lost 10% in the last 3 sessions after hitting the last in a series of records on September 2.

The Dow and S&P 500 also tumbled, along with bourses in Europe.

In commodity markets, oil prices had their biggest drop since the early days of the pandemic, falling to their lowest level since June on worries over demand.

Sterling was the big story in the foreign exchange market, slumping against the dollar and other major currencies as investors fretted over heightened Brexit tensions ahead of crunch trade talks between London and Brussels.

The pound began its fall on Monday, September 7, after Prime Minister Boris Johnson revived the prospect of a no-deal Brexit, saying that if a European Union (EU) trade deal was not struck by October 15 then there would not be one.

Sterling fell further following confirmation that the head of the UK government’s legal department has resigned over Johnson’s last-minute changes to Britain’s EU Withdrawal Agreement.

Northern Ireland Secretary Brandon Lewis admitted that the changes break international law in “tightly defined circumstances.”

The 8th round of negotiations resume this week, with both sides talking tough as the end of a one-year transition period approaches.

“It looks like the wheels of the Brexit bus are finally falling off, as news of the head of UK government legal [department] resigns,” said analyst Sebastien Clements at international payments company OFX.

Key figures around 8:50 pm GMT
  • New York – Dow: DOWN 2.3% at 27,500.89 (close) 
  • New York – S&P 500: DOWN 2.8% at 3,331.84 (close)
  • New York – Nasdaq: DOWN 4.1% at 10,847.69 (close)
  • London – FTSE 100: DOWN 0.1% at 5,930.30 points (close) 
  • Frankfurt – DAX 30: DOWN 1.0% at 12,968.33 (close)
  • Paris – CAC 40: DOWN 1.6% at 4,973.52 (close)
  • EURO STOXX 50: DOWN 1.4% at 3,267.37 (close)
  • Tokyo – Nikkei 225: UP 0.8% at 23,274.13 (close)
  • Hong Kong – Hang Seng: UP 0.1% at 24,624.34 (close)
  • Shanghai – Composite: UP 0.7% at 3,316.42 (close)
  • West Texas Intermediate: DOWN 7.6% at $36.76 per barrel
  • Brent North Sea crude: DOWN 6.3% at $39.78 per barrel
  • Pound/dollar: DOWN at $1.2981 from $1.3167 at 9 pm GMT
  • Euro/pound: UP at 90.70 pence from 89.76 pence
  • Euro/dollar: DOWN at $1.1775 from $1.1817
  • Dollar/yen: DOWN at 106.00 yen from 106.27 yen