Wall Street's Dow in Biggest 2-Day Slide Since June as Pelosi Stirs Fear With Taiwan Visit

NEW YORK (Sputnik) - Stocks tracked by Wall Street’s Dow Jones Industrial Average fell again on Tuesday to rack up their biggest two-day loss since June as financial markets convulsed over US House Speaker Nancy Pelosi’s visit to Taiwan against China’s warnings not to do so.

Adding to the weight on US stocks was the remark by San Francisco Federal Reserve chief Mary Daly that the central bank is nowhere close to winning its battle with inflation and interest rates will conceivably have to keep rising until it does.

“US stocks went on a rollercoaster ride as traders grew nervous over China’s retaliation over House Speaker Pelosi’s trip to Taiwan [and] a reminder from Fed’s Daly that their interest rate hiking cycle is nowhere near done,” said Ed Moya, analyst at online trading platform OANDA.

The Dow, which comprises stocks of 30 large US corporations, closed down 1.2%, adding to Monday’s drop of 0.1%. Combined, it was the biggest two-day drop since the June 27-28 trading period.

The S&P 500 index, representing the top 500 US stocks, finished down 0.7% after Monday’s decline of 0.3%.

The Nasdaq Composite Index, which comprises marquee technology names such as Amazon, Apple, Netflix and Google, dipped 0.2% on the day, similar to the previous session.

Pelosi arrived in Taiwan on Tuesday, casting aside private warnings from the Biden administration about the risk that her high-profile diplomatic visit could bring and drawing a sharp response from the Chinese government.

Daly signaled that the Fed will continue raising rates to bring inflation back to the central bank’s target of 2% per year from current reading of 9% a year, as per the Consumer Price Index.