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Stocks - S&P Slips as Trump Sparks Fears of Prolonged Trade War

Stock MarketsMay 28, 2019 04:48PM ET
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© Reuters.

Investing.com – U.S. stocks closed lower Tuesday on rising fears of a prolonged U.S.-China trade war after President Donald Trump said the U.S. was "not ready" to make a trade deal.

The S&P 500 fell 0.84%. The Nasdaq Composite lost 0.39% and the Dow slumped 0.93%.

“I think they probably wish they made the deal that they had on the table before they tried to renegotiate it,” Trump said Monday at a joint press conference in Tokyo alongside Japanese leader Shinzo Abe. “They would like to make a deal. We’re not ready to make a deal.”

The latest update on trade comes in the wake of escalating U.S.-China tensions after Trump hiked tariffs on $200 billion of Chinese goods from 10% to 25%.

Beijing hit back by raising tariffs on $60 billion worth of American products.

The increasing investor jitters over U.S.-China trade put U.S. Treasury yields on the back foot as they fell to their lowest level since September 2017, forcing banking stocks lower.

JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) closed lower, keeping the broader financials in the red.

Falling energy stocks also contributed to the slump, despite a rise in oil prices on expectations for reduced domestic supplies after flooding dented crude flow distributions from the main U.S. storage hub in Cushing, Okla.

In tech, chipmakers, which are particularly vulnerable to the ongoing U.S.-China trade war, remained under pressure, though Advanced Micro Devices (NASDAQ:AMD) proved an exception to the overall decline.

AMD rallied 9.8% after announcing the launch of several 7nm products across all markets within the next six months.

Rival chipmaker Intel (NASDAQ:INTC) fell nearly 2.5% on the news, as Cowen analyst Matthew Ramsey said that with AMD set to launch 7nm Ryzen 3 PC and Rome server CPUs in mid-2019, Intel will "no longer be able to rely on its n-node silicon advantage, and will instead lean on its incumbency and breadth of silicon as its 10nm chips are not expected out until late 2019 in PCs and 2020 in servers."

In other company news, Fiat Chrysler (NYSE:FCAU) accelerated 7% after proposing a merger with Renault (PA:RENA) in a bid to form the world's third-largest automaker. Ford Motor (NYSE:F) and General Motors (NYSE:GM) both fell.

In economic news, U.S. consumer confidence overshot economists' expectations, rising to a six-month high on the back of ongoing strength in the labor market.

Top S&P 500 Gainers and Losers Today:

Advanced Micro Devices, Total System Services (NYSE:TSS) and Activision Blizzard (NASDAQ:ATVI) were among the top S&P 500 gainers for the session.

Kraft Heinz (NASDAQ:KHC), Mylan (NASDAQ:MYL) and Perrigo Company (NYSE:PRGO) were among the worst S&P 500 performers of the session.

Stocks - S&P Slips as Trump Sparks Fears of Prolonged Trade War
 

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Khalsa Singh
Khalsa Singh May 31, 2019 8:12AM ET
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Willing to bet Trump and his cronies are minting billions by being in a position to manipulate markets.
Kenny Yap
Kenny Yap May 29, 2019 12:37AM ET
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American should change their attitude of entitlement. If US$ depreciate yr purchase power will drop in order to decreased US from printing more money. Less face these the money belong to top 10% of American only the rest just use government project to sustain their lifestyle(only know how to use money with no saving!!!)!!!!!
Kenny Yap
Kenny Yap May 29, 2019 12:17AM ET
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The way Donald D say & acting only one thing is to get attention & show off his B. ***** Look around him all r yes men/women(pretty face thats all) only....all his sacastic boombastic word he use on his opponent show thats why some people like him for show biz. without adding value to D world!!!>>>>>>
Ju Hng
Ju Hng May 28, 2019 11:18PM ET
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U.S. dollar is the reserve currency. That's why American can buy everything from the world by "issuing more money/debt". Trade seems not balanced as the result. The President is too greedy. He wants more than that. He actually can fix the trade"problem" by giving up the right of dollar as reserve currency.
Andrew Hook
Andrew Hook May 28, 2019 11:18PM ET
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No worries about , soon trumpist will realize tax cut may have boost the US economy's but with trade war they will lost more than Chinese with price up, slowing economy, personal debt increase and very few to buy national debt.
Andrew Hook
Andrew Hook May 28, 2019 11:18PM ET
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in your opinion why China is buying gold. You have heard about Breton's wood?
nick baldanza
nick baldanza May 28, 2019 11:18PM ET
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China is about to go into debt crisis. In case anyone has noticed their inflated economic industrial production data.
Andrew Hook
Andrew Hook May 28, 2019 11:18PM ET
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nick baldanzaand US not according to you (22 trillion) The difference is China own his debt while US don't and have to finance it on the market. If I have the choice I will prefer buy Chinese debt rather than US. Why China is buying physical gold in your opinion ? To offer a counterpart with the Yuan. You may not have any idea but China is lending a lot of money to Africa and Asia. Why they are willing to develop new silk road ?
Alexander Khatskevich
Alexander Khatskevich May 28, 2019 9:08PM ET
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PUT YOUR NUMBER and start changing your life today  > link.ucoin.site/alter-xcapital
bomz bomzov
bomz bomzov May 28, 2019 9:04PM ET
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A great day to trade with volatility over 1 percent. using leverage and shorts people do not whine and earned a lot of money.
bomz bomzov
bomz bomzov May 28, 2019 9:04PM ET
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bull market gives 36% per year, today gives 6% per day
bomz bomzov
bomz bomzov May 28, 2019 8:57PM ET
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easy money does not exist. on the stock market you need to have knowledge of a variety of financial factors to use complex tools
bomz bomzov
bomz bomzov May 28, 2019 8:54PM ET
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the federal reserve raised the rate four times. bull market ended October 18 last year.
Alvin Tostig
Alvin Tostig May 28, 2019 8:41PM ET
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As Trump said, China is paying our treasury for the tariffs levied on them to the tune of 100's of billions per year. It is now time we levy a 100% or more tariff on this insolent nation and let them pay off our national debt in ten years! But lets not stop there, lets put tariffs on all foreign nations if they want to trade with us. It's all free money to our treasury so why not? Trump is on to something here and has the guts to make it happen. Tariff EVERYTHING coming into our country NOW. MAGA.
Andrew Hook
Andrew Hook May 28, 2019 8:41PM ET
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lol Haward was not your Uni
bomz bomzov
bomz bomzov May 28, 2019 8:30PM ET
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like capricious kids. Mr. Trump is your president. He warns you - there will be no deal with China. international relations are within his remit, and he have all  information about Americans security.
Wei Shiaw
Wei Shiaw May 28, 2019 8:29PM ET
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One of the hobby trump has is talking. Good Talk can make ppl happy and Lough.
John Wong
John Wong May 28, 2019 8:27PM ET
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China only has to wait him out until the next election by that time Trumps policies will have turned this economy to ****** Aside from the economy there is plenty not to like about Trump, we just need the right candidate to exploit Trumps vulnerabilities.
Fred Smith
Fred Smith May 28, 2019 8:10PM ET
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I'd like to see USA cutoff ALL trade talks with Communist China , meet again next March 2020, then begin over, but tax them until then
Fred Smith
Fred Smith May 28, 2019 8:08PM ET
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Communist China underes Trump. They walked away from good deal. Now they will be taxed even higher.
Patrick Johnston
Patrick Johnston May 28, 2019 7:47PM ET
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There's immense ignorance running rampant in the comments here. Will someone please tell me how the trade between these two countries was fair before 2018 'war' began?
bomz bomzov
bomz bomzov May 28, 2019 7:47PM ET
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it was “fair” because of the corruption and stupidity of the establishment. the bureaucracy has not earned a cent in its life, spending only Americans money.
Andrew Hook
Andrew Hook May 28, 2019 7:47PM ET
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You know better than every one PhD man lol
Matthew NT
MatthewBT May 28, 2019 7:33PM ET
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Actually sounds like Trump is really the one desperate for a deal. China has stated clearly there is no point for talk if Trump is not ready for more balanced deal, & never even invited US for next round in Beijing. Now EU has said the same, no trade talks with US if Trump's wants to use "gun to the head" approach & basically only US giving huge list of demands with little offer. Trump's bullying tactic won't work against another superpower. Trump is not dealing with small contractors for his real estate deal here. History has repeatedly shown tariff war will only hurt everyone, including US. American, get ready to pay dearly for Trump's 25% tariff.
TAIJI JIANG
TAIJI JIANG May 28, 2019 7:33PM ET
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absolutely correct
Randy Koehler
Randy Koehler May 28, 2019 7:33PM ET
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What do you suggest we do then? keep getting ramrod by China just so the market goes up or clear the way for a better future? This is not Trump's fault, yes, I agree his remarks are mostly unwarranted but somebody needs to take a stand. It's got completely out of hand as it is and Idc of China surpasses us one day either. We're fine. we can sustain ourselves. China can't sustain gdp growth as it has without us, watch
Bull Shitter
Bull Shitter May 28, 2019 7:21PM ET
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Thank you Mr Trump to be so tough, intelligent and skilled. Finally we have a president that understand how to make business and politics... MAGA 2040.
David Wong
David Wong May 28, 2019 7:21PM ET
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That MAGA trick ain't going to work this time. The farmers know now.
ATOMIQ ILYA
ATOMIQ ILYA May 28, 2019 7:21PM ET
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No way
Fred Smith
Fred Smith May 28, 2019 7:21PM ET
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Farmers are voting Trump about 97%.
Phil Lin
Phil Lin May 28, 2019 7:19PM ET
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Trump is the root cause of the end of 10year long bull market.
bomz bomzov
bomz bomzov May 28, 2019 7:19PM ET
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financial speculation is not the whole market.  Americans do not have to lose hundreds of billions of dollars for stock prices.
Phil Lin
Phil Lin May 28, 2019 7:19PM ET
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You are right. Stock market speculation does not represent the whole market. But if we look deeper, what trade war implies is potential erosion of company profitability, which in turn affects their valuation. You may say company may just pass on the tariff to the consumers to maintain their profitability, but the thing is, do the people still have such a strong purchasing power to absorb this 20-30% increase in prices? You think there will be no cut back on consumption?
Phil Lin
Phil Lin May 28, 2019 7:19PM ET
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Please note that consumption takes up 70% of the US GDP.
bomz bomzov
bomz bomzov May 28, 2019 7:19PM ET
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Фил Лин today is not the end of the world. corporations will transfer their business to other countries.
bomz bomzov
bomz bomzov May 28, 2019 7:19PM ET
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Phil Lin today is not the end of the world. corporations will transfer their business to other countries.
David Wong
David Wong May 28, 2019 7:19PM ET
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Trump, Pompeo. and Bannon are racist. What their speech, they don't like chinese because China is winning bug everywhere.
Fred Smith
Fred Smith May 28, 2019 7:19PM ET
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Communist China are thieves. Your boy obozo isn't in office to give free stuff. They are now begging for meetings with Trump of which he,said, Go away, we're not ready now..
bomz bomzov
bomz bomzov May 28, 2019 7:19PM ET
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for a communist all who love their country are racists
David Wong
David Wong May 28, 2019 7:17PM ET
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Is over for Trump. He thinks he can play hard ball with China. He didn't know President Shi got some ball skills of his own.
Hank Williams
Hank Williams May 28, 2019 7:06PM ET
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There will be a tweet to save the market. BUT will it work. Don't think Navarro realized where this is going.
David Wong
David Wong May 28, 2019 5:13PM ET
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China doesn't want a deal now. China will the long game and wait Trump out.
Q Chen
Q Chen May 28, 2019 5:13PM ET
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However, Mr Trump assumes that China wants a deal badly and will surrender soon!
Kira Nelson
Kira Nelson May 28, 2019 5:13PM ET
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Meanwhile all traders and investors will remain in “jitters” while the two continue their ping-pong game, with lemonade breaks in between.
Titus Polichnia
Titus Polichnia May 28, 2019 5:00PM ET
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unless the gutless swine in this country elects someone else that will hand us over to China on a silver platter
Titus Polichnia
Titus Polichnia May 28, 2019 4:56PM ET
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steady the course, mr trump. eventually we will prevail
Robert Barnes
Robert Barnes May 28, 2019 4:55PM ET
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he farts and the market changes.
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