Wall Street ended Wednesday’s trading slightly lower as investors took time to understand a reading on May consumer inflation. Also, the US-China trade stalemate has become a significant worrying point. The S&P 500 lost six points, 0.20%, to 2,880 while the Dow Jones Industrial Average lost 44 points, 0.17%, settling at 26,005. On the other hand, the Nasdaq Composite declined 30points, 0.38%, to settle at 7,793.
The Labour Department’s report showed that the US consumer prices rose by 0.1% in May suggesting moderate inflation. That report supported the case for a rate cut by the Federal Reserve. The Fed policymakers are scheduled to meet on 18-19 June. Banking stocks that benefit from higher interest rates fell by 1.4%. The general financial sector fell 1%.
The S&P 500 energy index dropped 1.4% which was the most among the 11 S&P sectors. The US crude prices fell by 4% amidst demand worries. The worst performing S&P 500 sector for the year-to-date after Wednesday’s losses was energy. The best performing sector for the day was S&P 500 utilities gaining 1.3%. The utilities are positively affected by falling rates.
The Trade War
Investor sentiment was also battered after President Trump said that he was holding up a deal with China. The president also added that he had no interest in moving ahead unless Beijing agrees to almost five major points. Semiconductor stocks fell on Wednesday as expected since they get a large amount of revenue from China.
A 2.3% drop in the Philadelphia Semiconductor index was recorded. Also, Applied Materials Inc, Micron Technology Inc, and Lam Research Corp dropped more than 5% each.
Facebook saw its shares lose 1.7% after the Wall Street Journal reported that the company revealed contentious emails. These emails allegedly connect CEO Mark Zuckerberg to potentially problematic and damaging privacy practices. Tesla Inc fell 3.6% after the company’s CEO, Elon Musk, denied that the company was languishing in demand and production problems.
France’s Dassault Systems SE confirmed that it reached an agreement to buy Medidata Solutions Inc., a US technology group. The agreement is valued at $5.8 billion. After that announcement, Medidata shares fell 3.6%.
On Thursday in the Asian morning session, share trading mixed up due to the overnight slip for stocks on Wall Street. The Nikkei 225 dropped 0.48% while the Topix index slipped 0.86% in Japan. The Kospi in South Korea lost 0.25% while the ASX 200 in Australia traded slightly higher.
The Shanghai Composite Index in China traded 0.39% down Hong Kong’s Hang Seng Index also lost 1.46%. The Hang Seng had also closed 1.73% lower after violent clashes between riot police and protesters over a controversial extradition bill.