US open: Stocks sent lower amidst fears of a financial crisis in Turkey
US stocks joined their European counterparts in the red on Friday amid concerns about the crisis in Turkey and how it might impact other markets.
As of 1540 BST, the Dow Jones Industrial Average had dropped 0.81% to 15,302.68, while the S&P 500 had slipped 0.61% to 2,836.30 and the Nasdaq was trading 0.45% weaker to 7,856.23.
SpreadEx's Connor Campbell pointed out that there was "a whole lot for investors to fret about", with the potential for a financial crisis in Turkey adding to concerns surrounding the US-China trade war and the high likelihood of a "no deal" Brexit coming to fruition.
"The US open managed made things worse on Friday. The Dow Jones plunged 200 points after the bell, diving back towards 25,300 for the first time in over week, marking a huge drop from the 25,700-teasing intraday highs seen on Tuesday," said Campbell.
Over in Europe, equity markets retreated as the euro slumped to a new yearly low below $1.15 on concerns that Turkey's problems may be spreading to Europe. The single currency took a dive after a Financial Times report suggested that the European Central Bank sees BBVA, UniCredit and BNP Paribas as particularly exposed to the Turkish lira's declines.
The lira - which has been under pressure on the back of worries about Turkish President Erdogan's influence over monetary policy - fell to an all-time low beyond TL 6 against the dollar after a meeting on Friday between a Turkish delegation and US officials yielded no solution to a diplomatic rift over the detention of a US pastor in Turkey.
Jitters about Turkey sent investors fleeing to safe havens, boosting the dollar index to around a one-year high.
Investors were also mulling over a Reuters report that Vladimir Putin had warned the White House that sanctions it plans to impose against Moscow over the nerve agent attack of former spy Sergei Skripal earlier this year in the UK could be treated as a declaration of an economic war.
On the corporate front, Tesla was down 0.76% following a report that its board of directors will meet with financial advisors next week to discuss CEO Musk’s proposal to take the electric car maker private.
News Corp dropped 9.57% in early trade after it reported an annual net loss of $1.4bn, while DropBox slipped 7.99% after the bell despite an earnings beat as it said late on Thursday that its chief operating officer was stepping down.
On the data front, US consumer price inflation was steady last month at the headline level, despite sharp gains in fuel oil and used car and truck prices.
The consumer price index advanced by 0.2% month-on-month in July, leaving the year-on-year rate at 2.9%, according to the Bureau of Labor Statistics.
That was better than economists' forecasts for a pick-up in the headline rate of CPI to 3.0%.
"Stronger inflation and a tighter labour market will only support the Fed in raising rates and the USD in the process," said Markets.com analyst Neil Wilson.