The NASDAQ did not put up a good showing on Wednesday and this was its fourth such run in sequence after the firing of James Comey, FBI Director. The news, when it broke out, shook up the markets quite significantly but it appears that this was not a short term shock but one with some lasting implications as the markets refused to pull back up even after the incident. The main reason for this, as per experts, is that this completely unexpected firing of the FBI director has raised doubts about the President's ability to garner support in Washington. If he fails to do so, there is no question that he will face challenges in ushering in market friendly policies.
How big an impact?
Experts are in no doubt that the firing has undermined the confidence that the markets were very slowly recapturing. It has thrown investors into the 'wait and watch' mode where they are unwilling to make any moves either way until the situation becomes and bit clearer and so do future possibilities. The one thing that can be said with certainty is that it has left a big, adverse impact on the market and market sentiment. The Dow Jones Industrial dipped 32.67 points and the S&P 500 barely managed to post a gain mainly propped by energy sector stocks.
Uncertainty about the government
Clearly, the whole situation has created a lot of confusion about what the government is aiming to do and why. The facts of the case, as they appeared, created waves after it emerged that Comey had actually made a request for more resources to look into the allegations of Russian interference in the presidential campaign. Readers may remember that these allegations and reports of his connection with top Russian officials have been plaguing President Trump ever since his win. Now, the request made by Comey and his subsequent firing are being seen as connected, by many.
Two key congressional inquiries into the matter of Russian involvement in the presidential elections hinge on evidence collected via FBI investigation so with Comey's exit, it is unclear what these inquiries will base their investigations on. Interestingly, many Republican party members have made it clear that they do not quite understand what caused Trump to fire Comey and have also added that they do not fully agree with the decision to do so.