Market Update & Important Indicators:
Growing tensions between the U.S. and China exacerbated investors' fears of an all-out trade war between the world's largest economies, shaving more than 550 points off the Dow Jones Industrial Average as investors braced for more turbulence ahead. All 11 major sectors of the S&P 500 declined, as investors broadly sold stocks, with the deepest declines among companies, such as big industrial manufacturers like Boeing and Caterpillar, that stand to suffer from an escalation in protectionist trade policies. Friday's session marked the S&P 500's ninth 1% swing up or down in the past 11 trading days, a sign of stocks' uneasy footing and resurgent volatility. Investors were already grappling with the threat of inflation rising more quickly than expected, fears that were tamped down Friday after new data showed a steady, expected rise in wages last month, and concerns that technology stocks won't be able to generate the massive gains of previous years. The Dow fell as much as 767 points in the late afternoon before paring its decline to 572 points, or 2.3%, to 23,933. The S&P 500 declined 58 points, or 2.2%, to 2604, while the Nasdaq Composite slid 161 points, or 2.3%, to 6915. For the week, the Dow dropped 0.7%, the S&P 500 fell 1.4% and the Nasdaq declined 2.1%. The U.S. gold price rebounded on Friday night, jumping 0.5% to finish at 1,333.40 US$/oz.
European shares dropped 0.35% as a combination of downbeat U.S. economic data and trade-war jitters weigh on market sentiment, hitting banking stocks. The Stoxx Europe 600 fell 1.31 points to 374.82 as Washington floated a further $100 billion of potential tariffs and U.S. non-farm payrolls miss expectations. Germany's DAX fell 0.7% and France's CAC-40 declined 0.5%. Spain's Bankia was among the biggest fallers, down 1.3%.
Asian stocks dropped Friday as the tit-for-tat rhetoric on tariffs between the U.S. and Chinese governments continued to roil global markets. In Japan, the Nikkei 225 closed down 0.4%, while South Korea's Kospi dropped 0.3%. Hong Kong's Hang Seng Index bucked the trend of other Asian markets on Friday, rising 1%. The index was catching up on regional market gains Thursday when the city's markets were closed but remains down compared with levels before China's announcement of trade measures on Wednesday. China's domestic market and those in Taiwan and Thailand remain on vacation. Analysts and investors are discussing the knock-on impacts that a more serious escalation in trade tensions might bring.
Despite a flat finish to the day's trading, Australia's stock benchmark still managed its first weekly gain in 4 weeks. A late afternoon fade left the S&P/ASX 200 down 0.1 points Friday at 5788.7 as investors again worried about the potential fallout of trade tensions between Washington and Beijing after Trump said he was considering further tariffs. But the index notched a 0.5% gain for the week after recovering the last two days of the holiday-shortened week. For the day, gains by energy, industrial and property stocks were balanced by losses elsewhere.
The London Metal Exchange’s 3-month copper contract fell on Friday night, dropping 0.69% at 6,769/t. The other base metals were mixed. Lead prices rose 0.5% to 2,391/t, whilst aluminium prices continued to increase amidst tariff talk, rising 1.8% to 2,022/t. Nickel prices declined 0.4% to 13,220/t whilst zinc prices also dropped, falling 0.2% to 3,234/t. Tin prices were unchanged, remaining at 21,090/t.
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