Stocks - Trade Jitters Send Wall Street to Worst Week of Year

Investing.com - Stocks fell for a fifth-straight day Friday, with the S&P 500 and Nasdaq Composite suffering their worst weekly losses since the depths of the December slump.

If there was good news for stocks it was that buying kicked in after President Donald Trump reportedly softened his threat slightly to impose 10% tariffs on Chinese exports to the United States in September, according to CNBC. If there's proof China is, in fact, buying agricultural and other products, the United States might not impose the tariffs.

The S&P 500 was down 0.73% on the day. The Nasdaq Composite was down 1.32%, and the Dow Jones industrials fell 0.37%. The Dow had been down as many as 311 points early in the day.

The Nasdaq 100, a more concentrated list, was off 1.4%, with Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Cisco Systems (NASDAQ:CSCO), Facebook (NASDAQ:FB) and Google parent Alphabet (NASDAQ:GOOGL) contributing half the point loss on the day.

The S&P and Nasdaq declines were their fifth in a row. The Dow's decline was its fourth straight.

The S&P 500 finished down 3.1% for the week. The Nasdaq dropped 3.9%. The Dow's decline was 2.6%.

The declines exploded Wednesday after Federal Reserve Chairman Jerome Powell suggested in a news conference that the Fed's quarter-point rate cut might be a one-time event. He tried to take it back, but the rout was on.

The selling erupted again Thursday after Trump tweeted his threat to impose more retaliatory tariffs on China and continued into Friday until CNBC reported he softened his view if there's real agricultural buying. White House Economic Advisor Larry Kudlow, however, downplayed the report.

The trade battles and the Administration's unhappiness with the Fed's modest rate cut to 2% to 2.25% left many traders exhausted at the end of the week. Next week is light on economic reports. So, the potential for market drama is strong.

The focus on trade totally overwhelmed any market reaction to the Labor Department's report the economy added 164,000 jobs in July. The unemployment rate was unchanged at 3.7%. Payroll gains have slowed. But most economists said the report was solid.

But from an equity perspective, solid economic numbers can bring out the sellers as it hurts the chances for future interest rate cuts.

The Dow opened lower and slid steeply until buying started to kick in at about 11 AM ET (15:00 GMT).

The rebound wasn't enough to bring stocks overall back to even. Techs and communications services stocks were weak all day. NetApp (NASDAQ:NTAP) slumped more than 20% after warning that the cloud-data company's fiscal-first quarter revenue could be down as much as 20% from a year ago.

Apple (NASDAQ:AAPL) dropped because it depends so much on access to the Chinese market for new business and because most of its products are manufactured in China. They would potentially be hurt by a new round of tariffs. The shares were down 2% on the day and subtracted 29 points from the Dow.

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Oil prices recovered from a big selloff Thursday. WTI futures rose $1.71 to $55.66. Brent crude rebounded $1.39 to $61.89. Both had fallen more than 7% a day earlier.

Interest rates were lower, with the 10-Year Treasury yield falling to 1.855% from 1.892% on Thursday.

Winners and Losers in the S&P

Consumer products company Newell Brands (NASDAQ:NWL), software security company Fortinet (NASDAQ:FTNT) and food packaging company Sealed Air (NYSE:SEE) were among the top S&P 500 performers Friday.

NetApp (NASDAQ:NTAP), Arista Networks (NYSE:ANET), plastics manufacturer LyondellBasell Industries (NYSE:LYB) and Cisco Systems (NASDAQ:CSCO) were among the weakest S&P 500 performers.