NEW YORK: US stocks finished solidly lower Wednesday as the Trump administration sent mixed signals on China, reviving fears that a trade fight between Washington and Beijing would escalate.
The Dow Jones Industrial Average dropped 0.7 percent to 24,117.59.
The broad-based S&P 500 shed 0.9 percent to 2,699.63, while the tech-rich Nasdaq Composite Index slumped 1.5 percent to 7,445.08.
US stocks opened on an upbeat note after President Donald Trump backed off a plan to impose aggressive new restrictions on Chinese investment in sensitive sectors in favor of a strategy that strengthened oversight of foreign takeovers but did not single out China.
But investors were later startled to hear White House economic advisor Larry Kudlow say tougher action on China was still being contemplated.
“The president is unsatisfied with their response on trade talks and so he put out there the possibility of additional tariffs,” Kudlow told reporters. “The ball is in their court.”
Art Hogan, chief market strategist at Wunderlich Securities, said the Trump administration had “a confusing message on trade, almost to the point where they’re making it up as they go along.”
It is unclear when or how the trade war fears will lift, he added.
“We don’t know what it is that’ll feel like a victory for anybody,” he said.
Emily Roland, head of capital markets research at John Hancock Investments, agreed.
“Markets have been bouncing back and forth depending on trade,” she said. “To us it looks like a game of ping-pong.”
Technology shares were under pressure, including semiconductor companies Micron Technology, down 4.3 percent and AMD, down 3.4 percent.
Banking shares also retreated, with Bank of America and JPMorgan Chase both losing more than one percent as the yield on the 10-year US Treasury bond fell.
But oil giants Exxon Mobil and Chevron both won more than one percent as oil prices rose.
Shares of 21st Century Fox jumped 2.4 percent after the Justice Department approved Disney’s takeover of key Fox assets with conditions.
Disney fell 0.3 percent. Comcast, which has also bid for the Fox assets, fell 1.5 percent.
Source: Brecorder
