Traders work on the floor of the New York Stock Exchange (NYSE) on August 13, 2018 in New York City. The Turkish lira hit a record low on Monday, rattling global currency markets and falling 8 percent against the dollar.
The Dow Jones Industrial Average dropped 137.51 points to 25,162.41, while the S&P 500 declined 0.8 percent to 2,818.37. The Nasdaq Composite pulled back 1.2 percent to close at 7,774.12. The Dow and Nasdaq briefly broke below their 50-day moving averages.
The major indexes trimmed losses late in the day after CNBC reported that the White House is preparing to expand rules favoring American products in government projects.
Tech, the largest sector by weight in the S&P 500, fell more than 1 percent as a disappointing quarterly report from Chinese tech giant Tencent weighed. Tencent’s U.S.-listed shares dropped 6.7 percent after reporting its slowest revenue growth rate since 2015. Shares of U.S. tech giants Facebook, Apple and Alphabet all dropped. Other Chinese tech stocks like Alibaba and JD.com also fell.
Meanwhile, Macy’s shares dropped nearly 16 percent as the company’s quarterly report showed it is struggling to grow sales. The company posted better-than-expected quarterly earnings and revenue, but its sales still fell on a year-over year basis.
Equities also fell amid lingering worries about Turkey’s financial situation, continued strength in the U.S. dollar, a sell-off in copper and broad weakness in emerging markets.
A Turkish regulator said Wednesday it was limiting banks’ currency swap transactions. The move is likely aimed at curbing short selling against the lira, which has recently taken a beating.
The Turkish lira fell to a record low earlier this week as global investors fear Turkey’s economic troubles could spell trouble for other economies around the world. Last month, Turkey’s inflation rate hit 16 percent, well above the central bank’s 5 percent target.
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