Wall Street traders and investors were preparing for a big rally after special counsel Robert Mueller‘s long-awaited investigation did not find enough evidence that President Donald Trump ‘s 2016 campaign colluded with Russia, according to Attorney General William Barr.
Stock index futures open for trading at 6 p.m. ET.
In a letter to top lawmakers, Barr wrote:
“The Special Counsel’s investigation did not find that the Trump campaign or anyone associated with it conspired or coordinated with Russia in its efforts to influence the 2016 U.S. presidential election.”
The White House also said the results are a “total and complete exoneration of the President of the United States.”
Mueller’s investigation had been a lingering concern for investors as it could have hindered Trump’s efforts to further cut taxes and further ease regulations on corporations. The news removes a worry for Wall Street and can help the administration focus on more pressing issues for the market, such as striking a trade deal with China or even working with Democrats on an infrastructure plan.
“This cloud has now dissipated and this should allow markets to breathe a sigh of relief,” said Jeff Kilburg, CEO of KKM Financial. “This could be a real positive for the market if it allows Trump to focus on getting the Chinese trade deal concluded.”
The investigation nagged the Trump administration for nearly two years. It led to the indictment and arrest of several Trump’s operatives, including ex-campaign manager Paul Manafort. Manafort was sentenced to 47 months in jail for fraud earlier this month.
Investors across the world worried the probe could also bring down Trump himself by potentially leading to his impeachment. Now, Wall Street can remove one block from the proverbial wall of worry and eye the ongoing U.S.-China trade talks.
China and the U.S. are expected to strike a deal sometime in April. Sentiment around the negotiations improved this year to help lift stocks to within striking distance of their record highs set last year. White House press secretary Sarah Huckabee Sanders said Saturday that Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer were headed to Beijing for further talks on Thursday. Trade worries plagued investors for most of last year as they worried a prolonged trade war between the world’s largest economies could hinder corporate profits.
“The fact that these tariffs may not be going away is having a negative multiplier effect on the global economy. There’s a massive GDP destruction going on,” said Larry McDonald, founder of The Bear Traps Report. “We will rally on [the Mueller report] but everything that took us down last week will keep rearing its ugly head again.”
Equities fell sharply on Friday as an inverted yield curve stoked fears that an economic recession is on the horizon. Disappointing economic data released Friday out of Europe, coupled with a downgraded economic outlook from the Federal Reserve added to those concerns.