Stocks stagnate after Trump warns tariffs on China could stay for "substantial period"



FEATURE - On February 27, 2019, Chairman of the Federal Reserve Board, Jerome Powell, makes his gestures as he speaks at the Financial Services Committee of the Capitol Hill House of Representatives in Washington. The message that the Federal Reserve is about to send Wednesday, March 20, after its last political meeting, is soothing. It reflects a sharp change in tone since the beginning of the year in the face of the slowdown in the United States and abroad, persistent inflation and a nervous stock market. (AP Photo / Pablo Martinez Monsivais, File)Associated press

  • Inventory ended the day mixed after the US Federal Reserve had declared that it was unlikely that interest rates would increase these years.
  • This was a reversal of the initial hike following the release of the Fed's statement.
  • The benchmark, the S & P 500 and the Dow Jones Industrial Average, both closed in negative territory after yielding the gains, while the Nasdaq Composite managed to post a gain.
  • Follow the movements of the stock market in real time.

The shares ended mixed on Wednesday after the Federal Reserve announced that it was unlikely that interest rates would increase its forecasts this year and that it planned to end its balance sheet run-off. the end of September.

The S & P 500, the Dow Jones Industrial Average and the Nasdaq Composite all reached session highs in response to the announcement, before the S & P and Dow dropped those gains.

"Not surprisingly, the US Federal Reserve has been patient and cautious, echoing the latest wave of dovish speech, "said Candice Bangsund, vice president and portfolio manager at Fiera Capital, in an email.

"We expect this neutral position to prevail in the near term or at least until the macroeconomic backdrop stabilizes and the" opposing currents "that stifle sentiment have eased somewhat."

The central bank has also clouded its economic outlook, saying the labor market "remains solid", but that economic growth has slowed relative to its "solid" rate in the fourth quarter.

"Although the deterioration of the economy and the sharp downward plunge in points are not necessarily surprising news, they certainly contributed to the recovery we saw this afternoon during the announcement balance sheet, "said Scott Buchta, director of revenue strategy at Brean Capital, said in an email that stocks have gone up.

Read more: The Federal Reserve has just reduced its outlook for the economy

The shares had been under pressure before the central bank's statement after President Donald Trump told reporters that he "was talking" to leave tariffs on Chinese products for an extended period, even though the states States had concluded a trade agreement with China.

In response to reporters' questions as the President was preparing to leave the White House for an event in Ohio, Trump said that the US could maintain tariffs on products Chinese, even if a commercial agreement was concluded.

"We are not talking about removing them, we are talking about leaving them for a substantial period of time, because we have to make sure that if we reach an agreement with China, China will respect the agreement," Trump said.

His comments caused a significant drop in stocks just before 1 pm AND.

White House officials who took part in negotiations with Beijing have called for a mechanism that would allow the United States to re-impose trade restrictions on the Chinese if a trade agreement, not yet finalized, is violated.

"This is not what we wanted to hear," said Peter Boockvar, chief investment officer of the Bleakley Advisory Group, in a note to clients referring to Trump's comments.

The United States and China have been engaged in a trade war for about a year. The United States has imposed tariffs on Chinese goods worth $ 250 billion, while China has imposed new duties at $ 110 billion.

The back-and-forth tariff dispute has caused economic damage to both economies and has become one of the main concerns of investors.

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