The next presidential election will take place on November 2020. It means that political rivalry will only become even harsher during the next several months. Nevertheless, Republican and Democratic lawmakers should not jeopardize the stability of the U.S. economy. Otherwise, this will have a negative impact on the stocks in the U.S. and this may cause a financial crisis. Unfortunately, U.S. President Donald Trump is not doing enough to tackles these issues.
The political climate in the U.S. is very important and as tensions can hurt not only the U.S. but the global economy in general. However, the current situation is far from ideal.
On Tuesday, House Speaker Nancy Pelosi made an announcement which has the potential to disrupt the stock markets. She said that the House of Representative’s made the decision to launch an official impeachment inquiry. The talks about impeachment started a long time ago. However, until Tuesday, it was one just the possibility, and Pelosi’s statement is a serious challenge for Trump.
Trump avoided impeachment inquiry after Robert Mueller’s investigation. However, this time U.S. Congress members decided it was the time to launch an investigation. Donald Trump has the desire to win the second term in office. This inquiry may change his plans.
The problem is that Trump asked the President of Ukraine to have a look at the business activities of Joe Biden’s son. Pelosi stated Trump wanted to gain an advantage by starting an investigation in Ukraine. This could damage the reputation of his political rival.
U.S. and European Stocks on Wednesday
Stock markets in the U.S. as well as abroad reacted to the news that Trump is facing an impeachment inquiry. For example, yesterday S&P 500 suffered the most significant percentage drop in a month. On Wednesday the Dow Jones Industrial Average fell by 0.19%. Meanwhile, S&P 500 decreased by 0.24%.
The Pan-European Stoxx 600 fell by more than 1% on Wednesday.