Stocks finish lower as NAFTA risks loom large for North American pact.
U.S. stocks ended lower on Wednesday as fears of a U.S. withdrawal from NAFTA gripped the markets.
The benchmark S&P 500 Index (NYSEARCA:SPY) fell 0.2% to 2,746.11, with eight of 11 sectors contributing to the losses. Utilities, telecommunication services and materials were among the biggest losers.
The Dow Jones Industrial Average (NYSEARCA:DIA) declined 51.86 points, or 0.2%, to 25,333.94.
Meanwhile, the technology-heavy Nasdaq Composite Index (NYSEARCA:QQQ) closed down 0.3% at 7,140.20.
All three major averages closed in record territory just 24 hours earlier.
Implied volatility in U.S. stocks declined on Wednesday for the first time in three sessions. The CBOE VIX (NYSEARCA:VXX) declined 2.6% to close at 9.82, on a scale of 1-100 where 20 represents the historic average. Wall Street’s fear index climbed above 10.00 on Tuesday for the first time this year.
Canadian policymakers are increasingly convinced that U.S. President Donald Trump will pull out of the North American Trade Agreement (NAFTA), setting the stage for a major fallout among the three signatories. NAFTA, which has been in force since the early 1990s, supports millions of jobs directly and indirectly.
The Final Word: Geopolitical risks are ramping up once again, and as we saw in 2017, this could have a major impact on stocks. Until now, geopolitical concerns have only had a short-term effect on the market, with unrelenting optimism continuing to drive the market forward.