Momentum on Wall Street ran out of fuel in the last hour of trading and the market fell for the first time in four days on Thursday due to fears of a surge in tensions between the United States and China.
The S&P 500 was on the rise for much of the session and managed to accumulate gains of 1.1%. But the progress disappeared after President Donald Trump announced a press conference on China on Friday. This immediately sparked concerns among investors about a possible deterioration in relations between the world’s two largest economies, which earlier this year signed an agreement to maintain at least a truce in their trade war.
“The concerns are that this will escalate over the summer,” said Quincy Krosby, director of market strategy at Prudential Financial. “It’s like lighting a match”:
The S&P 500 lost 6.40 points, or 0.2%, to 3,029.73. The Dow Jones Industrial Average went from a gain of 210 units to a drop of 147.63 at the close of operations, a decrease of 0.6% to 25,400.64. The Nasdaq Composite Index dropped 43.37 integers, 0.5%, to 9,368.99.
The United States and China have exchanged harsh criticism on issues ranging from Hong Kong to their response to the coronavirus pandemic. Investors fear that this could lead to another grueling round of tariff increases between the two countries, which would only further harm a global economy hit by a severe recession due to the pandemic.
Yields on long-term Treasury bills rose on Thursday due to a government report that the number of Americans who applied for unemployment benefits fell for the eighth week in a row, although the figure remains incredibly high.
Perhaps most importantly to the market, the number of continued claims for unemployment benefits dropped from 24.9 million to 21.1 million. This is the first decline since layoffs skyrocketed in March. If it continues, economists say, it could mean that more people are returning to work as states begin their reopens.
The yield on the 10-year Treasury bill rose to 0.70% from 0.67% on Wednesday. Yield tends to vary according to optimism about the strength of the economy and inflation.
The benchmark US barrel of crude for July delivery gained 90 cents and ended at $ 33.71. The international benchmark Brent mix added 55 cents to $ 35.29 a barrel.
– .
