Stocks reel from Barcelona attacks and fear Trump’s agenda in limbo after firing his chief strategist

Global stock markets sank on Friday as traders sought haven investments such as gold following a terror attack in Barcelona and the glum mood was compounded by a week of drama in Washington which intensified doubts about President Donald Trump’s ability to deliver on pro-growth policy promises such as tax reform.

After a late morning boost on Trump’s firing of controversial White House strategist Steve Bannon, the dollar and US equities lost their lustre as investors were left wary after a week in which Trump alienated potential allies.

Investors also questioned how much Trump’s removal of Bannon, a conservative media entrepreneur and activist who was a darling of Trump’s base, would pave the way for policies such as tax reform.

“It’s only marginally positive as it doesn’t put money in anybody’s pocket in the way tax reform would,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “There’s still question marks on what this means and what other shoes are to drop.”