Truss-tastrophe Markets Rise on PM Step-Down Kiplinger Kiplinger is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Here's why you can trust us.

Truss-tastrophe Markets Rise on PM Step-Down

Stocks are higher after Liz Truss said she would resign as U.K.'s prime minister following a short but eventful tenure. (opens in new tab) (opens in new tab) (opens in new tab) Newsletter sign up Newsletter (Image credit: Getty Images) By Dan Burrows published 20 October 2022 U.S. stocks applauded the surprise resignation of Liz Truss as traders bet the exit of the shortest-serving prime minister in British history would restore a measure of calm to the U.K. currency and bond markets. Truss said on Thursday she would resign as British prime minister, brought down just six weeks into the job by an economic program that shattered investor confidence and enraged much of her Conservative Party.

Are Stocks Cheap Enough to Start Buying? Speaking outside the door of her Number 10 Downing Street office, Truss accepted that she had lost the faith of her party and said she would step down next week.

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Profit and prosper with the best of Kiplinger's expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail. Profit and prosper with the best of Kiplinger's expert advice - straight to your e-mail. Sign up The move was an abrupt reversal for Truss, who said on Wednesday she was a "fighter and not a quitter." But the following day she told a mass of journalists gathered in Downing Street that she realized she could no longer deliver on the promises that won her the Conservative leadership. "I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Conservative Party," said Truss, who was supported only by her husband with her aides and loyal ministers noticeably absent. A new leadership election will be completed by next Friday, Oct. 28. Those expected to run include former finance minister Rishi Sunak and Penny Mordaunt, a former defense minister. Truss's resignation ends a brief but inglorious chapter for the U.K. Her so-called "mini-budget" created chaos in the market for British government debt and sent the pound on a roller-coaster ride. Financial experts were unsparing in their criticism of Truss's short but eventful tenure, and what are expected to be deleterious and long-lasting consequences.

For Stocks, the Midterms May Not Matter. Here's Why That's A Good Thing. "First her policies went up in flames, then her brief career as Prime Minister," noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. "The great political gamble of Liz Truss has spectacularly backfired but not before wreaking significant damage to the U.K. economy. It will take considerable time before the risk premium attached to U.K. assets fades away, following the financial nervous breakdown which followed the mini-budget." British government bond prices rose on Thursday, although their gains were tempered by the prospect of another week of political upheaval as the Conservative Party chooses a successor to Truss.

How Stocks Are Reacting

U.S stock futures started in the red Thursday as news of Truss's resignation reverberated through global markets, and the major benchmarks did gap down at the open. But markets on the American side of the Atlantic soon bounced back, with the major U.S. benchmarks rising sharply within the first hour of trading. The blue-chip Dow Jones Industrial Average added more than 380 points at one point early in the session. The broader S&P 500 and tech-heavy Nasdaq Composite tacked on similarly smart gains.

Can Stocks Picked by Artificial Intelligence Beat the Market? 3 Stocks to Watch Strength in mega-cap tech stocks such as Apple (AAPL (opens in new tab)) and Microsoft (MSFT (opens in new tab)) helped power markets higher, as did gains in Amazon.com (AMZN (opens in new tab)). Dow stock International Business Machines (IBM (opens in new tab)) rallied after the company reported better-than-expected quarterly results and raised its full-year outlook. It's also the case that an encouraging start to what is forecast to be the worst earnings season since the height of COVID-19 lockdowns of 2020 has given U.S. equities a tailwind in recent sessions. The market is also benefiting from technical strength, analysts say, although few are calling for a definitive end to our current bear market anytime soon. The major indexes' initial reaction to the end of the Truss premiership appears to be one of good riddance to bad rubbish. But a state of bedlam persists in Britain. Instability at the top of the world's sixth largest economy will surely send out more shockwaves in the days, weeks and even months ahead. Reuters reporters Kate Holton, Farouq Suleiman, William James, Sachin Ravikumar, Kylie MacLellan, Elizabeth Piper, Andrew MacAskill, Muvija M and Andy Bruce contributed to this article.

Investing in Emerging Markets Still Holds Promise Explore More Apple (AAPL) Amazon.com (AMZN) Microsoft (MSFT) International Business Machines (IBM) Dan BurrowsSenior Investing Writer, Kiplinger.comDan Burrows is a financial writer at Kiplinger, having joined the august publication full time in 2016.
A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics and more.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts. Latest Stock Market Today: Stocks Keep Climbing on Interest-Rate Optimism Investors continued to cheer Thursday's inflation update, with the Nasdaq and S&P 500 scoring their best week in months. By Karee Venema • Published 11 November 22 New Target Stores Will Be Huge The discount retailer will expand its footprint and design with more stores and remodels that will reflect the new concept. By Bob Niedt • Published 11 November 22 You might also like Stock Market Today: Stocks Lift Off After Encouraging Inflation Report The major market indexes rallied to their best day in two years after data showed inflation slowed in October. By Karee Venema • Published 10 November 22 Stock Market Today: Markets End an Up Month on a Down Note October might have ended with a whimper, but the month overall delivered big-time gains for equity investors. By Dan Burrows • Published 31 October 22 Stock Market Today: Stocks Sizzle on Hopes for a More Dovish Fed The major indexes ended a tumultuous week with a bang thanks to easing inflation data. By Dan Burrows • Published 28 October 22 Stock Market Today: Stocks Close Mixed on Muddled Earnings and Econ Data Conflicting earnings news and a strong headline GDP report that was weak under the hood made for a turbulent session. By Dan Burrows • Published 27 October 22 Stock Market Today: Stocks Stumble on Ugly Earnings from Tech Bellwethers Disappointing quarterly results from Microsoft and Alphabet interrupted an otherwise encouraging earnings season. By Dan Burrows • Last updated 26 October 22 Stock Market Today: Stocks Sizzle With Big Tech Earnings on Tap The major indexes notched a win ahead of the busiest week of Q3 earnings so far, with Alphabet and Apple among those reporting. By Karee Venema • Published 24 October 22 Stock Market Today: Stocks End Higher But Snap Spirals The stock market finished the week strong on hopes the streak of aggressive Fed rate hikes will end sooner rather than later. By Karee Venema • Published 21 October 22 Stock Market Today: Stocks End Choppy Session With a Loss A burst of buying power sent stocks higher mid-morning, but the markets couldn't maintain the momentum. By Karee Venema • Published 20 October 22 View More ▸ kiplinger About Us (opens in new tab) Terms and Conditions (opens in new tab) Privacy Policy (opens in new tab) Cookie Policy (opens in new tab) Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site.
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