Wall Street stock markets ended Tuesday trading session with declines triggered by the words of US President Donald Trump against China, making an early settlement of the trade dispute between the two countries again unlikely.
As a result, major US indexes began trading with declines. Dow Jones initially dropped 150 points or 0.5%, the broader S&P 500 lost 0.4%, and the Nasdaq technology index initially dropped by 0.4%. During the session, some of the losses were offset.
In the end, the blue-chip index Dow Jones Industrial Average lost 0.1%, or 22 points, to 27,199 points, while the S&P 500 fell by 0.26%, or almost 8 points, to 3,013 points. The technology Nasdaq, the drop was 20 points, or 0.24%, to 8,273 points.
Donald Trump warned that China is earnings time against the upcoming US presidential election in late 2020. When re-elected in November next year, the People’s Republic will have to prepare for an even tougher deal, threatened Trump on Tuesday and added: “Or there will be no agreement”.
Trump criticized China at a moment when a delegation led by Finance Minister Steven Mnuchin and Trade Representative Robert Lighthizer was in Shanghai to meet with Chinese counterparts. Although the US officials have cooled expectations for a big deal this week, there is hope that at least progress can be made in the fight against reciprocal duties, which began about a year and a half ago.
In his tweets, Donald Trump expressed skepticism and said that China could not be trusted. Despite Trump’s claims, China insists it buys American agricultural goods.
Traders, on the other hand, have also focused on the upcoming two-day meeting of the US Federal Reserve, with central bankers expected to cut key interest rates by 25 basis points.
There was also macro news from the country during the day. Consumer spending and US prices rose moderately in June – a sign of slower economic growth and inflation that could cause the Federal Reserve to cut interest rates on Wednesday for the first time in ten years. The Department of Commerce reported that consumer spending, which accounts for more than two-thirds of the US economy, rose by 0.3%, with higher services and higher costs of other goods offsetting the decline in motor vehicle purchases. The May data were revised upward to 0.5% instead of the previously announced 0.4% rise. The economists surveyed expected consumer spending to increase by 0.3% last month.
The strong consumer spending has softened the blow to GDP due to weak exports and business investment. Last week, it emerged that the US economy grew by 2.1% last quarter, down by 3.1% in the first three months of the year.
Consumer goods prices, measured by the Personal Consumer Expenditure Index (PCE), increased 0.1% in June amid food and energy depreciation. The index increased by 0.1% in May. In the 12 months to June, it rose 1.4% after a similar jump in May.
In bond markets, the yields on 10-year bonds rose to 2.063%, while those on 30-year US Treasuries remained unchanged.
Corporate stocks performance
The stocks of Merck rose nearly 1% after the company presented its quarterly report, surpassing analysts’ expectations with a 56% gain in earnings.
The shares of Procter & Gamble rose by 3.8% after the company’s earnings and profits for the quarter exceeded Wall Street expectations, fueled by rising prices and strong demand for beauty products such as SK-II and Olay.
The stocks of Pfizer Inc fell by 6.39% and became the worst performer within the blue-chip composition after the company reported disappointing financial report.
the shares of the fashion brand Ralph Lauren declined by 3.81% despite that company exceeded its earnings and earnings expectations.
Beyond Meat tripled its sales revenue and raised its estimates. Nevertheless, the vegan burger manufacturer’s shares have plunged by more than 17%.
The top performers on the S&P 500 were National Oilwell Varco Inc (+11.32%), Martin Marietta Materials Inc (+9.98%) and Westinghouse Air Brake Technologies Corp (+9.45%), while on the flipside were Gartner Inc (-19.03%), Under Armour Inc C (-13.69%) and Under Armour Inc A (-12.28%).