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U.S. On Wednesday, the Trump Index announced new clues on Chinese products, the latest example of growing tension between the United States and its major trading partners, a complete trade war.
What are the markets doing?
The Dow Jones Industrial Average
DJIA, -0.51%
fell 156 points, or 0.6%, to 24,762. The S & P 500
SPX, -0.33%
was down 13 points, or 0.5%, to 2781. The Nasdaq Composite Index
COMP, -0.19%
fell 0.4% to 7.726, a decrease of 0.4%
The crisis comes after a four-day rally in the United States three indexes, a sequence that represents the longest Dow
The decline of the day was widespread, with 10 of the 11 primary sectors of the S & P 500 index having fallen that day. The materials and industry sectors, which both fell by more than 1%, led the decline. Both are considered among the most trade-related issues
What motivates markets?
The White House announced Tuesday that it would assess tariffs of 10% on an additional $ 200 billion worth of Chinese goods. The move is seen as deepening the gap with Beijing and sending a message to other trading partners that the United States is ready to step up a trade fight. Last week, Beijing collected $ 34 billion in taxes and Beijing fought back with similar rates.
A final decision on the products to be struck with the new tariffs is expected after a consultation period at the end of August.
The Chinese Ministry of Commerce said in a statement that the new samples are "totally unacceptable" and that the behavior is not only hurting China, but the world.
Recent market gains came as Wall Street looks to the upcoming second quarter earnings season, which is expected to post strong earnings growth. Such signs of a strong economy, combined with improved economic data, could provide a floor below the stock price, just as the trade issue provides a ceiling.
What do the analysts say?
"This is different from other commercial ads, because the size is much larger, and because China is unable to repay directly $ 200 billion because they do not matter.It is not known yet what that it could do next, but it's clearly a new step towards a full-fledged trade war, "said David Carter, who oversees about $ 2 billion as director of investments at Lenox Wealth Advisors
. degenerates into a full-fledged trade war, which will be a stronger force on the markets than sound fundamentals. "
What's in the Economic Calendar?
PPI, which excludes volatile food and energy.In the meantime, the growth rate of inflation at 12 months fell from 3.1% to 3.4%, the highest since the last months of 2011.
Separately, wholesaler inventories rose 0.6% in May. New York Fed, John Williams, will deliver a speech on economics at Brooklyn Town Hall at Brooklyn Law School at 4:30 pm
Among notable industrial values,
Boeing Co.
BA, -1.31%
fell by 1.1% while 3M Co. [19659025] MMM, -1.26%
was behind by 0.9% and Caterpillar Inc.
CAT, -1.85%
decreased by 1.6%.
Shares of 21st Century Fox Inc.
FOXA, -2.36%
dropped 2.5% after the media company significantly lifted its offer price to take in hand Sky PLC
SKY, + 0.10%
. The move is triggering a bidding war with Comcast Corp.
CMCSA, + 1.06%
who is also interested in the purchase of the British broadcaster. Comcast rose 1.3%.
Shares of NVIDIA Corp.
NVDA, -1.55%
fell 1.7% after the technology company announced last Tuesday a partnership with the German automaker Daimler AG [19659039] DAI, -1.83%
and giant of auto parts Bosch Ltd. to test robotic taxis in California.
Facebook Inc.
FB, + 0.32%
was down 0.2% after confirming Tuesday night that it could be fined about $ 660,000 by a US regulator following the Cambridge Analytica scandal.
Fastenal Co.
FAST, + 5.55%
rose 3% after the company announced Tuesday that its board had raised the quarterly dividend to 40 cents per share against 37 cents per share. The fixtures maker is expected to announce quarterly profits before Wednesday's opening.
What are the other markets doing?
ICE U.S. Dollar Index
DXY, + 0.01%
was flat at 94,139, after a report on wholesale inflation, while the yen
The USDJPY, + 0.23%
was weaker against the dollars. The male bought ¥ 111.21, compared to ¥ 111.00 on Tuesday night in New York.
Asian markets closed lower in response to tariff news, with Shanghai Composite
SHCOMP, -1.76%
slipping 1.8%. European stocks
SXXP, -1.18%
is also open firmly in the red.
CLQ8, -1.03%
and gold futures
GCQ8, -0.36%
were in decline.
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