2017.08.1721:37:00UTC+00U.S. Stocks Sold Off as S&P Marks Largest Loss in 3 Months

U.S. equities dropped on Thursday over concerns President Trump's latest controversies will make it less likely for the Congress to work with him to pass business-friendly legislation.

The Dow Jones industrial average briefly trimmed losses when reports indicated that Gary Cohn, a business friendly advisor to the president, has no plans to resign from his role as director of the National Economic Council. The 30-stock index tumbled 1.24 percent to close at 21,750.73.

The S&P fell 1.5 percent to 2,430.01, recording its worst as information technology led all sectors lower. The Nasdaq composite dropped 1.94 percent to 6,221.91, posting its third-biggest daily decline of the year.

Weak corporate results added pressure as well. Cisco Systems slipped four percent after the company said its security business revenue increased less than expected in the quarter earlier, which negates a quarterly report that was met expectations.

Small-cap stocks also sold off. The Russell 2000 index, a broadly used gauge of small caps, ended below its 200-day moving average for the first time since June 2016.

Wal-Mart dropped 1.6 percent despite the company reporting better-than-expected quarterly results. The retailer posted a decline in margins as a result of continued price cuts and e-commerce investments.