US Stock Market Overview – Stocks Slip, but Settle Up Strong for the Week

Energy shares buck the trend
David Becker
US Dollar Index

US stocks slipped Friday, and had a difficult time moving higher after experiencing upward momentum for most of the week. The large cap S&P 500 index closed at an all time high multiple times during the week and closed at a weekly all time high up more than 2.3% for the week. Oil prices continued to move higher as Trump announced that he was about to declare an attack on Iraq for retaliation for the destruction of an unmanned drone.

The US Commerce Department has banned five more Chinese entities from buying US components after blacklisting telecom giant Huawei last month. Sectors were mixed. Energy and Healthcare were the best performers in the S&P 500, Industrials and Technology were the worst.

Trump Halts Attack After Ordering It

President Trump ordered a military strike on Iran but changed his mind when he was told that there could be as many as 150-deaths with this retaliation. The Iranian shot down an unmanned drone over the Strait of Hormuz.  Reports suggest Trump warned Iran that an attack was imminent and called for talks, giving Iran a short period of time to respond.  The 10-year traded below 2% for the first time yesterday since November 2016.  The interest rates reduction is now priced in by mid-January 202 and a 4th by January 2021.

Semis Crush on Blacklist of Huawei

The US Commerce Department banned an additional five Chinese entities from buying components after blacklisting telecom giant Huawei last month. Higon, Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics Technology, Sugon and Wuxi Jiangnan Institute of Computing Technology are the names of the companies. The commerce department said that these companies’ activities pose a srisk of being involved in activities contrary to the national security and foreign policy interests of the United States. Shares of semis sold off on the news. The commerce department announcement came before President Donald Trump’s key meeting with Chinese leader Xi Jinping at the G-20 summit this month to discuss the lingering trade differences.

Refinery Stocks Surge on Fire

Refinery stocks surged on Friday as gasoline prices at the pump could rise for East Coast drivers after a massive explosion Friday affected operations at a Philadelphia refining complex responsible for as much as 27% of the region’s fuel production. This refining outage couldn’t come at a worse time for consumers, given the backdrop of the tensions with Iran and a time of the year when individuals usually travel. The summer driving season kicked off on Memorial Day. The explosion occurred just as US gasoline demand hit an all-time high last week. The pressure on gasoline prices also comes at a volatile time for oil prices, up more than 9% this week, after plummeting about 20% this spring.

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