As U.S. stocks face sharp losses Wednesday, analysts are assessing what the resignation of Gary Cohn from the White House could mean for markets.
Cohn, who had been the head of President Donald Trump’s National Economic Council, left after he failed to prevent Trump from backing a plan to impose tariffs on imports of aluminum and steel.
Read more: How a tariff-rattled stock market is reacting to Cohn’s resignation
And see: Trump tariffs may really be a backdoor way to get out of the WTO
Concerns about a possible global trade war have intensified following Cohn’s departure. Dow Jones Industrial Average futures YMH8, -1.24% were down by more than 400 points following the news, but have pared some of their losses.
Below are some of the initial reactions from analysts.
• “I’ve gone from being a little bit relaxed about the trade-war thing to being quite a lot more nervous.” — Kay Van-Petersen, global macro strategist at Saxo Bank, according to a Guardian report
• “To the extent that the initial reaction is too severe, and this is the beginning of more substantial trade negotiations and not necessarily a race to the bottom in terms of worldwide tariffs, then it may prove to be a buying opportunity. On the other hand, if a larger trade war breaks out, then it’s likely that markets will test the February lows and we could be in for even more volatility in the months ahead.” — Chris Zaccarelli, chief investment officer at independent advisor alliance
Check out: Meet Peter Navarro, the man who pushed Gary Cohn out of the White House
And read: Why a full-blown Trump trade war won’t happen
• “The only upside to the current situation is that tariffs on imported consumer goods would lead to higher inflation, but this is not how the Fed wants it to happen. Financial markets should recognize the future ramifications of Cohn’s departure. ... Had Cohn stayed, he would have been viewed as the counterbalance to temper future protectionist measures. Now there is nobody.” — Michael O’Rourke, chief market strategist at JonesTrading Institutional Services