Trade war jitters worry investors
U.S. stocks snapped a four-day winning streak to finish lower on Thursday, 30 August 2018 with the Dow falling back below 26,000, on a report that President Donald Trump is likely to press ahead with tariffs against $200 billion worth of Chinese products. Trade-related news has played a central role in the market recently amid worries that heightened tensions between U.S. and its major trading partners could not only hamper U.S. economic growth but derail the global economy at large.
The Dow Jones Industrial Average fell 137.65 points, or 0.5%, to 25,986.92. The S&P 500 index lost 12.91 points, or 0.4%, to 2,901.13. The Nasdaq Composite Index fell 21.32 points, or 0.3%, to 8,088.36 after earlier testing an intraday record of 8,133.30.
Losses were broad-based on Thursday, with 10 of 11 sectors settling in the red. The lightly-weighted materials sector was the worst-performing group, but the financials, industrials and consumer discretionary spaces also showed notable weakness. The utilities sector was the lone advancer.
In the tech sector, Amazon crossed the $2000 mark for the first time ever, adding 0.2%, and Facebook, Apple, and Netflix advanced between 0.8% and 1.0% apiece.
The ICE U.S. Dollar index was set for a weekly fall of 0.4%, but was trading up 0.2% on Thursday.
Trump reportedly wants to move ahead with his plan to slap tariffs on billions in additional Chinese imports as early as next week. Companies have until Sept. 6 to comment on the proposed duties and Trump wants to impose the tariffs once that deadline passes.
Thursday's economic data showed that initial jobless claims, a barometer of layoffs, rose by 3,000 to 213,000 in the week ended Aug. 25. Market had forecast a 212,000 reading. Nonetheless, the monthly average of claims fell by 1,500 to 212,250, the lowest level since December 1969.
Separately, Consumer spending climbed 0.4% in July, according to a government reading, matching the estimate. Incomes rose 0.3%. And the 12-month increase in the PCE index, the Federal Reserve's preferred inflation gauge, rose to 2.3% from 2.2%, marking the highest level since April 2012, suggesting the Fed is likely to maintain its hawkish bias.
Bullion prices ended lower at Comex on Thursday, 30 August 2018. Gold futures extended their slump on Thursday to a third straight session, settling at their lowest in a week, pressured by some strength in the dollar as U.S. economic data reinforced expectations the Federal Reserve will stick to a steady pace of rate increases.
December gold fell $6.50, or 0.5%, to settle at $1,205 an ounce, the lowest finish for a most-active contract in a week. It was trading around 0.7% lower for the week so far, and poised for a month-to-date loss of 2.3%, which would mark its fifth such loss in a row.
December silver shed 21.6 cents, or 1.5%, to $14.594 an ounce. The contract was looking at a weekly decline of 2%.
Looking ahead, the Chicago PMI for August and the final reading for the University of Michigan Consumer Sentiment Index for August will be released on Friday.
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