The markets’ man in the White House is on the way out.

It didn’t take long for the futures market to react. After it was reported Tuesday evening that Gary Cohn plans to resign, Dow futures plunged 410 points, or 1.7%, at the moment. He matters to Wall Street. As Director of the National Economic Council, he’s President Trump’s top economic adviser. He’s also a former Goldman Sachs executive and a free-trade Democrat.

He was one of the few remaining “globalists” in the White House. He’d opposed the tariffs on steel and aluminum imports that Trump has been proposing and tweeting about since last week, including Trump’s now immortal “Trade wars are good” tweet on March 2:

“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”

And that philosophy is anathema to Cohn and the stock market. But he apparently has lost that battle. He is expected to leave over the next few weeks, joining the list of high-profile departures from the White House.

“According to people familiar with his thinking,” cited by the New York Times, there may have been many reasons, and “officials insisted there was no single factor behind the departure.” But in the end, the top item on the list was likely his fervent opposition to tariffs and trade wars. “Mr. Cohn, a longtime proponent of free trade, believed the decision could jeopardize economic growth,” the Times said.

Cohn is – or was – the markets’ guy in the White House. And now he’s on the way out.

Trump told the Times in a statement: “Gary has been my chief economic adviser and did a superb job in driving our agenda, helping to deliver historic tax cuts and reforms and unleashing the American economy once again. He is a rare talent, and I thank him for his dedicated service to the American people.”

According to the Times:

White House officials said that Mr. Cohn was leaving on cordial terms with the president and that they planned to continue discussing policy even after his departure.

People close to Mr. Cohn said that he had planned to stay for roughly a year, and that he had accomplished a number of things he cared about. That included the $1.5 trillion tax cut that Republicans passed last year.

So everything is hunky-dory and everyone is on best terms. And since Cohn is already wealthy and will likely slip right back through the revolving door on Wall Street into a top slot, he doesn’t even have to write a kiss-and-tell book, unlike so many others before him. And that must be a relief for the White House.

But markets are not happy. Dow futures are down 420 points at the moment, or 1.7%. S&P 500 futures are down 40 points, or 1.5%. Nasdaq futures are down 100 points or 1.5%. The Nikkei, minutes after opening in Tokyo, is down 180 points, or 0.8%.

The futures market is often enough no indicator of how stocks will be doing during regular trading hours. But it is an indication that the Tariff Tantrum has re-emerged with some magic up its sleeve.

There is a lot of opposition even among top Republicans and in Corporate America to these tariffs and igniting a trade war, but Trump has not yet backed off. However, I would expect Trump to change his mind if the Dow heads down something like 10% over the next few days. As we have seen in the past, politicians get wobbly knees when the stock market craters. But if it doesn’t, if this is nothing but a little hiccup, Trump’s stance might have some staying power.

As far as retail investors are concerned, they ended the year with record enthusiasm, but then their mood soured in January even before the sell-off and collapsed entirely in February. Read… Retail Investor Bullishness Collapses

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