The stock market was set to rebound from a disastrous Christmas Eve.
Dow futures pointed to a 175 point gain. The S&P 500 and Nasdaq futures were both up about 1%.
Thin trading and a lack of news typically send stocks higher in the last week of December. But Washington has a different playbook this holiday break.
A partial government shutdown, Treasury Secretary Steven Mnuchin’s questions about banks’ health and signals that President Donald Trump could fire Federal Reserve Chairman Jerome Powell upset markets on Monday, sending the Dow down 653 points.
After markets tanked on Christmas Eve, Trump said Tuesday that he remains confident in Mnuchin, but he renewed his criticism of the Fed, accusing it of hiking rates too fast.
Those doubts come of top of worries about how sharply the US economy might lose steam next year.
“The markets are in panic mode that the US economy is tanking,” Stephen Innes, head of Asia-Pacific trading for online broker Oanda, said in an email. “If the US economy turns south, global capital markets are in for a world of hurt.”
The only certain thing about the market this month is uncertainty. The slightest bit of bad news can turn a rally into a rout. For example, stocks were up nearly 400 points on Friday but ended the day down more than 400 points.
Asian markets rattled
In Asian markets, Japan’s Nikkei swung between gains and losses Wednesday before closing up nearly 1%. The shaky trading followed a 5% plunge on Christmas Day that dragged the Japanese index into a bear market. In China, the Shanghai Composite shed 0.3% on Wednesday.
Fears about slowing economic growth have been exacerbated by a series of unsettling moves from Washington in recent days.
The turmoil in Washington is making traders in other countries fret about the stewardship of the world’s biggest economy.
“Japanese investors are absolutely shocked by the lack of the leadership team in Washington,” Jesper Koll, head of Tokyo-based investment fund WisdomTree Japan, told CNN. “The reality is that the president no longer has a team of credible leaders to manage the American and the global economy.”
Global investors already had a laundry list of worries, including China’s slowing economy, the Trump administration’s trade war with China and the unpredictability surrounding Brexit.
“There’s a lot of uncertainty, and that’s one of the biggest things that the market doesn’t like,” Andrew Sullivan, a Hong Kong-based market economist, told CNN.
Some of the world’s biggest markets are yet to react to Wall Street’s Christmas Eve sell-off. Stock exchanges in London, Frankfurt, Hong Kong and Australia remain closed and will have to digest the recent turmoil when they reopen Thursday.