A recent article in the Wall Street Journal reported that the price of the largest ETF in the United States, the S&P 500 ETF, fell nearly 12% on Wednesday morning as investors looked for better returns in light of the news that the Trump administration is expected to cut off payments to the nation’s coal industry.
The S&P 500 index closed down 0.5% to 1,965.65.
The Dow Jones Industrial Average fell 2.6% to 16,084.80, and the Nasdaq Composite dropped 3.9% to 4,638.71.
The decline in prices for the S & P 500 ETF is a direct result of the Trump Administration’s decision to end payments to coal miners, a major source of American jobs.
Trump announced last month that the coal industry’s payment cutbacks were expected to save $6 billion in the first three months of the fiscal year.
This would represent a $6.8 billion savings from the first quarter of the current fiscal year, according to the Congressional Budget Office.
The President also said he was canceling payments to all American companies, including those that produce coal, and his administration is planning to slash taxes and other benefits for coal companies, with a goal of cutting $100 billion in tax revenue in the fiscal 2019 fiscal year alone.
However, Trump’s announcement also sparked a number of calls from politicians and business leaders for the Federal Reserve to hike interest rates on the nation in order to boost economic growth and to prevent the coal-mining industry from being shut down.
The stock market on Wednesday, however, saw the biggest selloff since the election of Donald Trump.
The S&p 500 ETF fell nearly 10% in early morning trading, falling almost 1,100 points or 0.3% to 2,096.09.
The Nasdaq composite also fell 3.5%, or 2.3%, to 2.919.97.
Meanwhile, the Dow Jones industrial average fell 2% to 20,788.13, the NasDAQ fell 3% to 5,858.07, and both the S and P 500 fell 1.9%, or 0,824.65, to their respective closing levels.