Stocks - S&P Slips as Trump Sparks Fears of Prolonged Trade War
Published May 28, 2019 03:45PM ET
Updated May 28, 2019 04:48PM ET
Investing.com – U.S. stocks closed lower Tuesday on rising fears of a prolonged U.S.-China trade war after President Donald Trump said the U.S. was "not ready" to make a trade deal.
The S&P 500 fell 0.84%. The Nasdaq Composite lost 0.39% and the Dow slumped 0.93%.
“I think they probably wish they made the deal that they had on the table before they tried to renegotiate it,” Trump said Monday at a joint press conference in Tokyo alongside Japanese leader Shinzo Abe. “They would like to make a deal. We’re not ready to make a deal.”
The latest update on trade comes in the wake of escalating U.S.-China tensions after Trump hiked tariffs on $200 billion of Chinese goods from 10% to 25%.
Beijing hit back by raising tariffs on $60 billion worth of American products.
The increasing investor jitters over U.S.-China trade put U.S. Treasury yields on the back foot as they fell to their lowest level since September 2017, forcing banking stocks lower.
JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) closed lower, keeping the broader financials in the red.
Falling energy stocks also contributed to the slump, despite a rise in oil prices on expectations for reduced domestic supplies after flooding dented crude flow distributions from the main U.S. storage hub in Cushing, Okla.
In tech, chipmakers, which are particularly vulnerable to the ongoing U.S.-China trade war, remained under pressure, though Advanced Micro Devices (NASDAQ:AMD) proved an exception to the overall decline.
AMD rallied 9.8% after announcing the launch of several 7nm products across all markets within the next six months.
Rival chipmaker Intel (NASDAQ:INTC) fell nearly 2.5% on the news, as Cowen analyst Matthew Ramsey said that with AMD set to launch 7nm Ryzen 3 PC and Rome server CPUs in mid-2019, Intel will "no longer be able to rely on its n-node silicon advantage, and will instead lean on its incumbency and breadth of silicon as its 10nm chips are not expected out until late 2019 in PCs and 2020 in servers."
In other company news, Fiat Chrysler (NYSE:FCAU) accelerated 7% after proposing a merger with Renault (PA:RENA) in a bid to form the world's third-largest automaker. Ford Motor (NYSE:F) and General Motors (NYSE:GM) both fell.
In economic news, U.S. consumer confidence overshot economists' expectations, rising to a six-month high on the back of ongoing strength in the labor market.
Top S&P 500 Gainers and Losers Today:
Advanced Micro Devices, Total System Services (NYSE:TSS) and Activision Blizzard (NASDAQ:ATVI) were among the top S&P 500 gainers for the session.
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Kraft Heinz (NASDAQ:KHC), Mylan (NASDAQ:MYL) and Perrigo Company (NYSE:PRGO) were among the worst S&P 500 performers of the session.
Written By: Investing.com
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