Fresh tariff threats from President Trump sank stocks on Thursday, pushing the S&P 500 to its fourth consecutive daily decline and reinvigorating investor worries about the outlook for the global economy.
The trading day didn’t start out negative. Stocks rose throughout the morning, after the Federal Reserve had cut interest rates on Wednesday, with the S&P 500 rising as much as 1 percent.
Then, just before 1:30 p.m., Mr. Trump said on Twitter that the United States would impose a 10 percent tariff on an additional $300 billion worth of Chinese imports starting in September.
Over the next hour, the market’s gains quickly melted away. Outside the stock market, benchmark oil prices plunged by 7 percent and yields on government bond tumbled.
“There’s no ambiguity about what’s pushed us off the ledge,” said Ian Burdette, senior managing director at brokerage firm Tribal Capital Markets. “The tweet just really took the wind out of the sails.”
Investors are jittery for good reason. In May, trade-related tweets from President Trump triggered a painful bout of market volatility that sent the S&P 500 down 6.6 percent.
Economic data released Thursday indicated ongoing softness in the American economy. The Institute for Supply Management’s manufacturing index showed a slowing in the United States industrial sector. A Department of Commerce report also showed construction spending fell sharply and unexpectedly in June.
But those were just the latest updates on the economic headwinds hitting the United States. Public companies, which are in the middle of reporting on second-quarter profit and sales numbers, have also been offering weak outlooks for the rest of the year, prompting analyst to reduce earnings expectations.
Aug 1, 2019
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