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S&P 500, Dow Jones Futures Dive As Investors Lose White House Ally Cohn

Futures for the S&P 500 index, Dow Jones industrial average and Nasdaq 100 fell sharply early Wednesday morning after President Trump's chief economic advisor Gary Cohn resigned as Trump remains committed to imposing a 25% tariff on steel and a 10% tariff on aluminum.

Stocks had rallied in the last few days on optimism that the final tariffs would not be as damaging as feared. So Cohn's abrupt departure suggests that the major averages would come under near-term pressure.

S&P 500 futures fell 1% below fair value. Dow Jones futures tumbled 1.2%, Nasdaq 100 futures sank 0.8%. The dollar also retreated.

Over in Asia, Japan's Nikkei lost 0.8% while the Shanghai composite sank 0.55%.

At a trade policy meeting at the White House Tuesday, Trump sought assurance that everyone would publicly back the tariffs, but Cohn did not answer, Bloomberg reported. Hours later, Cohn was gone.


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The former Goldman Sachs president, who will leave at an unspecified date, was widely respected on Wall Street and a fierce opponent of protectionist economic policies in the White House. His exit undercuts hopes for Trump to delay or modify those tariffs. It also means Cohn won't be around to argue against further protectionist moves.

Indeed, there were reports that the U.S. can levy a big trade case vs. China. In some ways, criticism of the steel and aluminum tariffs could spur the China action. Opponents of those proposed duties note that the U.S. imports very little steel from China.

Trump did say Tuesday that Canada and Mexico might be tariff relief if there's a revised Nafta deal. But there's also a scenario where the U.S., Canada and Mexico do not agree, and Trump scraps the pact that ties North America's supply chains tightly.

Meanwhile, the European Union Trade Commissioner Cecilia Malmström said the EU is working on provisional tariffs vs. the U.S. over the steel and aluminum duties.

Among big steel and aluminum users, Boeing (BA) slid 2% in early trade on the stock market todayUnited Technologies (UTX) lost 2% while General Motors (GM) was not yet active early Wednesday but had fallen more than 2.5% late Tuesday.  DowDuPont (DWDP), which said steel tariffs hurt the case for new U.S. plant, retreated 1.8%.

Apple (AAPL) fell 1%.

Apple, Boeing, DowDuPont and United Technologies are all Dow Jones components.

U.S. Steel (X) climbed 1.9%.

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