S&P, Dow Tumble as Trump Raises Concerns Over China Trade DealTrump said he was “watching closely” whether China would meet its commitments to increase U.S. goods purchases under the trade deal.
The major U.S. stock indexes finished mixed on Wednesday after U.S. President Donald Trump cast doubt on a trade deal with China and data showed U.S. private employers laid off 20 million workers in April, underscoring the economic fallout of the coronavirus outbreak.
The benchmark S&P 500 and blue chip Dow Jones Industrial Average both fell, while the tech-heavy NASDAQ Composite ended higher, although it pulled back late in the session after Trump said China may or may not keep the trade deal.
In the cash market on Wednesday, S&P 500 Index futures settled at 2848.42, down 20.02 or -0.76%. The Dow Jones Industrial Average closed at 23664.64, down 218.45 or -0.98% and the NASDAQ Composite finished at 8854.39, up 45.27 or +0.58%.
Investors Dump Shares after Trump’s Comments Create Uncertainty Over China Trade Deal
Nervous investors already worried about the devastating effects of the coronavirus on the U.S. economy dumped stocks late in the session on Wednesday after U.S. President Donald Trump said he would be able to report in about a week or two whether China is fulfilling its obligations under a Phase 1 trade deal the two countries signed in January before the coronavirus spread globally.
Trump, whose administration is weighing punitive actions against Beijing over its early handling of the virus outbreak as economic damage mounts, said he was “watching closely” whether China would meet its commitments to increase U.S. goods purchases under the trade deal.
He said China was buying a lot of American farm products, but questioned whether the purchases were at the levels needed to meet the deal’s commitments on U.S. agricultural and manufactured goods, energy and services, Reuters reported.
“I’ll be able to report in about a week or two as to – not only with the farmers, but with many other industries also,” Trump said.
“They understand they have a deal and hopefully they’re going to get with the deal and we’ll see. They may. They may not. We’re going to find out,” Trump added.
Under the trade deal, China agreed to increase its purchases of U.S. goods from a 2017 baseline by $200 billion over two years, with about $77 billion in increased purchases in the first year and $123 billion in the second year. But the health crisis dealt a sharp blow to Chinese demand and its economy is only starting to recover, Reuters reported.