US Equities Down on Renewed Trade Worries

The U.S.-China trade news had a negative impact on the trade-sensitive industrials sector that fell 1.23%, while China exposed chipmakers also fell, with the Philadelphia Semiconductor Index slipping 1.14%.
James Hyerczyk
US Stock Indexes

The major U.S. stock indexes finished lower on Thursday just one day after the U.S. Federal Reserve trimmed its benchmark interest rate 25-basis points as expected and signaled it would hit the pause button until future notice. Furthermore, Fed Chairman Jerome Powell said rates wouldn’t rise until inflation moved higher.

In the cash market on Thursday, the benchmark S&P 500 Index settled at 3037.56, down 9.21 or -0.31%. The blue chip Dow Jones Industrial Average finished at 27046.23, down 140.46 or -0.52% and the technology-based NASDAQ Composite closed at 8292.36, down 11.62 or -0.14%.

Buy the Rumor, Sell the Fact Situation

If the stock market was at a major bottom, the Fed news would’ve been bullish. But the S&P 500 Index and NASDAQ Composite were coming off all-time highs so the price action suggests a “buy the rumor, sell the fact” situation.

The Fed news is dovish in my opinion, especially the comment that rates won’t go up until inflation goes up. It sounds like a green light to me for further upside action, however, worries about valuation at current price levels may have led investors to trim a little off the top on Thursday. Furthermore, some investors may have decided to take profits ahead Friday’s U.S. Non-Farm Payrolls report.

Renewed U.S.-China Trade Concerns

Tempering recent optimism around trade was a Bloomberg report that said Chinese officials have doubts about whether it is possible to reach a comprehensive long-term trade deal with Washington and U.S. President Donald Trump.

The U.S.-China trade news had a negative impact on the trade-sensitive industrials sector that fell 1.23%, while China exposed chipmakers also fell, with the Philadelphia Semiconductor Index slipping 1.14%.

Helping to soften some of the concerns was President Trump, who said the two countries would soon announce a new site where a “Phase One” trade deal will be signed after Chile cancelled a planned summit set for mid-November.

Earnings Remain Positive

Corporate earnings were a bright spot. Apple Inc. rose 2% after the iPhone maker forecast sales for the holiday shopping quarter ahead of expectations. Facebook Inc. gained 2% after reporting an uptick in users in lucrative markets and its third straight rise in quarterly sales growth.

Kraft Heinz Co. jumped 13% as the packaged foods company said it was spending more on marketing key brands next year, after reporting a better-than-expected third-quarter profit. Estee Lauder Cos. Inc. fell 4.8% after the cosmetics maker cut its forecast for full-year profit.

At the end of the month, two thirds of the S&P 500 have reported quarterly numbers. Of those companies, 75% posted better-than-expected results, FactSet data shows.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US