U.S. stocks fell sharply Monday, making it the worst Christmas Eve trading day ever.
Stocks extended a run of recent losses in response to turbulence in Washington, D.C., including President Trump’s early morning attack on the Federal Reserve as “the only problem” with the U.S. economy and an unexpected call by Treasury Secretary Steven Mnuchin to the six largest U.S banks on Sunday.
When the New York Stock Exchange finally closed Monday at 1 p.m. Eastern, the Dow Jones Industrial Average had dipped roughly 650 points, or nearly 3 percent. Closing below 22,000 made Monday the worst Christmas Eve trading day ever for the Dow.
The S&P 500 fell roughly 65 points, or 1.8 percent, and the Nasdaq Composite Index dropped 140 points, or 1.2 percent.
[Related: Trump intensifies attack on Fed: ‘They’re raising interest rates too fast’]
The losses only compound the market’s recent struggles. Last week the Dow lost 1,655 points, or 6.8 percent — its worst week of trading since October 2008 during the financial crisis. The S&P 500 also lost 7 percent for the week. The Nasdaq Composite is now 22 percent below its record, reached in August, and is in a bear market.
Some investors became uneasy last week about the Federal Reserve after Trump reportedly discussed dismissing chairman Jerome Powell — frustration that grew after the central bank raised its target interest rate for the fourth time this year. Trump has argued that the Fed is undercutting his efforts by tightening monetary policy.
The White House has dismissed the reports to the Washington Examiner, and incoming acting chief of staff Mick Mulvaney said in a Sunday interview that Trump has realized he cannot fire Powell.
But that didn’t stop Trump from tweeting about the central bank Monday, saying it is “the only problem” with the U.S. economy and the Fed doesn’t “have a feel for the Market.”
Stocks also suffered from uncertainty caused by Mnuchin’s unexpected announcement Sunday that he had spoken to the CEOs of the six largest U.S. banks to ensure they were liquid.
The executives of J.P. Morgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, Wells Fargo, and Citigroup assured Mnuchin that “they have ample liquidity available for lending to consumer, business markets, and all other market operations,” Mnuchin wrote.
But among market watchers, there had not been concern, prior to Mnuchin’s intervention, that there would be a run on banks.
The partial shutdown of the federal government added to market woes. Congress and the White House have not been able to reach an agreement on a spending bill. Trump has said he will only sign legislation that includes $5 billion in funding for a U.S.-Mexico border wall. The government remained partially shut down Monday.
And finally, there are ongoing concerns about the Trump administration’s current foreign policy.
Trump abruptly announced last week that the U.S. would be pulling all American troops out of Syria, and reportedly wants to do the same for troops in Afghanistan.
The president also pushed Defense Secretary James Mattis out of the administration — his last day is Jan. 1 — and the U.S.’ top envoy to the coalition against the Islamic State militant group announced his resignation in a rebuke of Trump.
Democratic leaders in Congress blamed the country’s economic woes on the Mattis ouster and the president’s conflict with the Fed chairman, tying it all to what they dubbed the “Trump Shutdown.”
“It’s Christmas Eve and President Trump is plunging the country into chaos. The stock market is tanking and the president is waging a personal war on the Federal Reserve – after he just fired the Secretary of Defense,” said Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif., in a joint statement shortly after U.S. financial markets closed.
“Instead of bringing certainty into people’s lives, he’s continuing the Trump Shutdown just to please right-wing radio and TV hosts,” they added. “Meanwhile, different people from the same White House are saying different things about what the president would accept or not accept to end his Trump Shutdown, making it impossible to know where they stand at any given moment. The president wanted the shutdown, but he seems not to know how to get himself out of it. As long as the president is guided by the House Freedom Caucus, it’s hard to see how he can come up with a solution that can pass both the House and Senate and end his Trump Shutdown.”
The NYSE is closed on Tuesday for Christmas Day. Wednesday through Friday are normal trading days.
