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A Relieved Wall Street Touches Record High After Comey Testimony

The Dow tickled all-time highs as the former FBI chief wrapped up his testimony.

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Wall Street investors seemed relieved after former FBI director James Comey’s testimony Thursday failed to disclose any particular smoking gun into the investigation into the Trump campaign’s possible ties to Russia during the election, sending the Dow Jones Industrial Average to a record high.

Just as the nation’s former top cop wrapped up his highly-anticipated testimony in front of the Senate Intelligence Committee, the Dow hit its all time high before retreating slightly. By comparison, the same index fell 373 points on May 17, the day committee asked Comey to testify about allegations that President Donald Trump asked him to stop the investigation of former national security adviser Michael Flynn.

In other words, traders are convinced that Comey’s open-session testimony leaves the president’s economic agenda unaffected, allowing plans to cut taxes, roll back financial and environmental regulations, and launch a big infrastructure program theoretically on track.

“Investors are not spooked by this at all,” said Eric Aanes, president and founder of Titus Wealth Management. “The only thing that could be an issue is [potential] delays into tax cuts.”

The CBOE Volatility Index (VIX), known more commonly as the fear index, traded lower by about 3 percent at 10.14. “There’s nothing that we didn’t already know,” Scott Clemons, chief investment strategist at Brown Brothers Harriman, told CNBC. “The real sigh of relief was seen in the Vix, which sold off a bit.”

Of course, Comey did repeatedly call the sitting president a liar, and said he started keeping detailed memos of their conversations because he was afraid Trump would distort what was said.

And Comey later briefed senators in a closed-door session, where he could discuss classified information pertaining to the ongoing investigation into possible collusion. Though lawmakers were mum on whatever was said behind closed doors Thursday , it’s not far-fetched to think they heard more than what was said in the open hearing in the morning.

At one point earlier in the day, Sen. Tom Cotton (R.-Ark.) asked Comey if he thought Trump had colluded with the Russians during the election. Comey responded that he didn’t want to answer that in an open session — a potentially ominous sign for the White House, and perhaps investors.

David Francis was a senior reporter for Foreign Policy, where he covered international finance. @davidcfrancis

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