China trade war worry whacks stock market for third day

US equities fell on Thursday, limiting a three-day loss for the market as investors’ concerns over the trade war persist.

The Dow fell 54 points, or 0.2%, to 27,766. Both the broader S&P 500 stock index and the Nasdaq technology compound also ended the day with a 0.2% drop each. Bond prices also fell, while 10-year Treasury yields rose to 1.77%.

Investors have become cautious this week amid concern from the US and China will not reach a trade agreement before the end of the year.

The world’s largest economies have been negotiating a resolution for their trade war ahead of new tariffs that will hit key consumer products on December 15th. Investors have been waiting for an agreement to be reached before this happens, as tariffs would. to Raise Smartphone Priceslaptops and many household items.

“That December 15 deadline on rates still weighs on the market,” said Quincy Krosby, chief market strategist at Prudential Financial. “The market needs the feeling that there will be no escalation in the trade war.”

China’s Ministry of Commerce has ruled out rumors that talks were in trouble. A ministry spokesman said Beijing was committed to continuing discussions on key concerns. The Wall Street Journal also reports that China’s chief negotiator has called for more face-to-face negotiations.

The optimism that Washington and Beijing were close to a “Phase 1” trade deal helped pave the way for gains in the market in recent weeks, including a series of all-time highs for major stock indices. . Shares have fallen from these highs in recent days as investors have raised more doubts about a trade resolution. The sale has the S&P 500 well on track for its first weekly loss after six consecutive weeks of gains.

Technology stocks were the biggest losers on Thursday. Many chip makers and technology hardware companies rely on China for sales and supply chains. Advanced Micro Devices fell 3.6% and Lam Research fell 3.5%.

The market will remain turbulent and risky as trade war and the threat of new tariffs loom on Wall Street, said Barry Bannister, Stifel’s head of institutional equity strategy.

“We don’t want consumer goods tariffs to go directly to retail buyers because they are the last stage the economy is in right now,” Bannister said.

Bannister warned that the market could fall sharply before the end of the year if the US and China cannot move forward. He also said the risk of a major recession has not gone away.

In:
• Stock Market
• China
• New York Stock Exchange