Stocks dropped Tuesday as technology and financial companies weighed on the U.S. market, with the firing of Secretary of State Rex Tillerson adding to concern over White House turmoil.
In a tweet sent Tuesday morning, President Donald Trump announced that the former CEO of ExxonMobil is leaving the Cabinet and will be replaced by CIA Director Mike Pompeo. The Dow swung about 429 points between its high and low mark, while the CBOE Volatility Index—Wall Street’s so-called fear gauge—climbed more than 7%.
The Dow Jones Industrial Average closed 171.58 points lower, or 0.68%, at 25,007.03. The S&P 500 fell 17.71 points, or 0.64%, to 2,765.31. The Nasdaq Composite snapped a seven-day winning streak, slipping 77.31 points, or 1.02%, to 7,511.01.
Investors were also keeping an eye on oil, which declined to about $60 per barrel as investors weighed how Tillerson's exit would affect policies regarding Iran and the rest of the Middle East.
John Lynch, Chief Investment Strategist for LPL Financial, said the suddenness of Tillerson’s departure from the Trump administration will not change the long-term outlook for stocks.
“Though market sentiment may be periodically impacted by geopolitical uncertainty, including announcements such as the Secretary of State change, we will continue to focus on market fundamentals that can drive long term performance in the economy,” Lynch explained.
The Tillerson news erased a gain triggered by a Labor Department report showing that its consumer price index rose 0.2% in February. While the reading was in line with estimates, it was well below the 0.5% jump in January and eased concern that the Federal Reserve will raise interest rates faster than expected.