Asian Stocks Lower, European Equities Mixed, U.S. on Holiday

Asian stocks finished lower on Wednesday with China leading the way after investors failed to hold on to earlier gains. Investors said trade dispute concerns continued to drive the price action ahead of the looming U.S. tariffs on China which are set to take effect on July 6.

European stocks are expected to open mixed amid lingering concerns over the trade dispute between the United States and the European Union. With the U.S. market closed, the price action is expected to be limited.

U.S. Stock Markets

The major U.S. stock indexes closed lower in Tuesday’s holiday shortened session. The New York Stock Exchange is closed on Wednesday for the U.S. Fourth of July holiday and the futures markets will see limited trading action.

On Tuesday, U.S. stocks reversed course late in the session, giving back early gains. Technology shares led the way lower, with Facebook dropping over 2 percent after the Washington Post reported a federal probe on the data breach linked to Cambridge Analytica had been broadened.

Weakness was also felt in the semiconductor sector with Micron finishing down 5.5 percent after dropping as much as 8 percent. The selling pressure was fueled by a report from Bloomberg, which said a Chinese court temporarily prohibited the sale of Micron chips in the local market.

U.S. Treasury Markets

U.S. Treasury yields finished lower on Tuesday as fears of an escalating trade dispute between the United States and its trading partners in China, Canada, Mexico and the European Union continued to weigh on economic sentiment. Investors were also squaring positions ahead of Wednesday’s U.S. bank holiday and Friday’s U.S. Non-Farm Payrolls report.

The benchmark 10-year Treasury note ended the limited session at 2.838 percent, while the yield on the 30-year Treasury bond finished at 2.965.

U.S. Economic Data

Despite concern over a potential trade war, the IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, rose another 4.6 percent to 56.4 in July, continuing its record run. The index has now spent 22 consecutive months in positive territory, remaining above 50 since October 2016. The majority of poll respondents support tariffs levied by the President and believe the U.S. has been taken advantage of on trade.

In other news, new orders for U.S.-made goods unexpectedly rose in May, climbing 0.4 percent amid strong demand for machinery, the Commerce Department said Tuesday. Economists were looking for a 0.1% increase. The previous report was revised upward to minus 0.4%.