Wall Street limped into the close on Friday with Turkey's financial crisis and meltdown in the lira fueling risk aversion across global markets and driving the Dow Jones Industrial Average to its lowest level in over a week.
Friday's price action put the Dow and S&P 500 in the red for the week for the first time in six weeks with a loss of 0.55% and 0.20%, respectively. The Nasdaq closed higher for a second week at +0.3%.
Panic selling erupted overnight across global equity markets as fears of contagion resulting from European banks' exposure to the Turkish lira and President Recep Erdogan's fiery nationalistic speech encouraged investors to seek refuge from risk in US Treasury securities.
Losses mounted when Trump authorized higher tariffs on imported Turkish steel and aluminium, sending the lira to another all-time low with a loss of more than 25%. Led by losses in the financial and materials sectors, the Dow spilled more than 250 points lower at the open, mirroring losses across Europe.
Emerging markets were crushed as well with the Emerging Market FX index having its worst week in almost seven years.
The headlines surrounding Turkey overshadowed benign inflation data in which consumer prices were up an as-expected 0.2% in June for both the nominal and the core. Year-over-year, the CPI was unchanged at 2.9% but the core inched up to 2.4% from 2.3%.
Dow Jones Industrial Index was down 196.09 points (-0.77%)
S&P 500 was down 20.30 points (-0.71%)
Nasdaq Composite Index was down 52.67 points (-0.67%)
FTSE 100 was down 0.97%
Nikkei 225 was down 1.33%
Hang Seng Index was down 0.84%
Shanghai China Composite Index was up 0.04%
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