Trump impeachment calls hit S&P hard

US stocks have fallen in volatile trade, giving the S&P 500 its biggest daily drop in a month, as a push for the impeachment of US President Donald Trump gained momentum among Democrats in the US Congress.

Further pressuring Wall Street, disappointing consumer confidence data underscored concerns over the economic impact of a prolonged US-China trade war.

Democratic House Speaker Nancy Pelosi will announce a formal impeachment inquiry of Trump, a Republican, later on Tuesday, according to several media reports.

Support among Democrats for the start of impeachment proceedings increased after news that Trump may have sought foreign help in smearing a political rival.

Stocks briefly pared losses after Trump, in a tweet, said his administration would release a complete transcript of a call with Ukrainian President Volodymyr Zelensky that is at the centre of the controversy.

He said the released transcript would show the call was "totally appropriate" and that he had not pressured Zelensky to investigate Democratic presidential hopeful Joe Biden and that there had been no quid pro quo for US aid in exchange for a probe.

"What all of that combined is going to do is ensure there is going to be elevated (market) volatility in both directions in the next few days," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

The Cboe volatility index jumped on Tuesday. The S&P 500 retail index fell 1.4 per cent while Amazon.com declined 2.4 per cent and was the biggest drag on the S&P 500 and Nasdaq.

The Dow Jones Industrial Average fell 142.22 points, or 0.53 per cent, to 26,807.77; the S&P 500 lost 25.18 points, or 0.84 per cent, to 2,966.6; and the Nasdaq Composite dropped 118.84 points, or 1.46 per cent, to 7,993.63.

Wall Street's major indexes lost their footing early when Trump took a harsh tone about China's trade practices.

Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, said the trade war was likely a bigger issue than possible impeachment proceedings for the market right now.

"I don't know how strong the case is for impeachment, so I don't know what will happen with that. We react first and think later," he said.

Nike slipped 0.6 per cent, ahead of the world's largest sportswear-maker's first-quarter results after the bell.

Declining issues outnumbered advancing ones on the NYSE by a 2.20-to-1 ratio; on Nasdaq, a 3.43-to-1 ratio favoured decliners.

The S&P 500 posted 31 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 36 new highs and 96 new lows.

Volume on US exchanges was 7.68 billion shares, compared to the 7.2 billion average for the full session over the last 20 trading days.

Austrlaian Associated PressBack to Breaking News

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