Customs disagreement maintenance on Wall Street
Wall Street Remains Stagnant Amidst Ongoing U.S.-China Trade Dispute
In the final trading day of the week, indices on Wall Street saw minimal movement, with the trade dispute between the United States and China remaining the primary focus. U.S. President Donald Trump's verbal assault on China's alleged breach of the recently agreed trade agreement intensified the economic standoff.
Despite a federal appeals court maintaining the tariffs for the time being, the market response was relatively subdued. The cautious reaction was partly due to the market's skepticism following the U.S. Court of International Trade's initial ban on the tariffs, which was later overturned by the appeals court, and the advance notice of the appeals court's decision during late trading on Thursday.
The Dow Jones Index gained a mere 0.1 percent, closing at 42,270 points. The S&P-500 ended the week virtually unchanged, while the Nasdaq Composite dropped by 0.3 percent. In a positive development, both the S&P-500 and the Dow Jones Index ended May with gains for the first time since January, as optimism about potential trade deal easement grew.
Thursday saw 1,262 stocks rise and 1,503 fall on the NYSE, with 51 remaining unchanged.
Meanwhile, personal income and spending data for April, along with the PCE price index, were released. The index is a key indicator of inflation for the U.S. Federal Reserve and, while it rose as expected on a monthly basis, it fell less than anticipated on an annual basis and less significantly than in March, easing inflationary concerns. Income grew more than expected, while spending increased at a slower pace but in line with forecasts.
The Chicago Purchasing Managers' Index (PMI) for May softened unexpectedly, although the University of Michigan's consumer sentiment index for May came in slightly better than expected in its second reading.
In corporate news, Dell's stock fell by 2.1 percent after initial gains, following the computer manufacturer's revised earnings guidance for the first quarter. Gap plummeted by 20.2 percent due to U.S. tariffs significantly increasing its costs, while American Eagle Outfitters slipped into the red in the first quarter and withdrew its full-year guidance, causing a 2.0 percent decline in its stock. Marvell Technology returned to profitability, benefiting from strong AI demand; however, its stock dropped by 5.6 percent due to expectations of negative impact from Trump's accusations against China. Ulta Beauty's stock surged 11.8 percent due to increased confidence for the year, while Regeneron's stock declined 19.1 percent following a disappointing drug trial result.
The dollar briefly recovered following the appeals court ruling but ultimately showed little change. Analysts at Bank of America suggest that U.S. tariffs are more detrimental to the U.S. economy and the dollar than to other countries and currencies.
Bond yields eased slightly, with the 10-year yield falling 4 basis points to 4.39 percent. Yields retreated as signs of easing inflation emerged, with the stronger dollar also weighing on the gold price, which dropped 0.8 percent to $3,294 an ounce, ending a four-month winning streak.
Oil prices dipped initially on Trump's verbal attack against China but recovered later. Brent and WTI prices slipped up to 0.4 percent. The market awaits the outcome of the Opec+ meeting over the weekend, which could decide on additional voluntary production cuts for July.
For further coverage of today's market activity, click here.
[1] China Files WTO Case Over Trump's Tariffs
[2] US President Donald Trump Announces Deal with China on Trade Dispute
[4] Trump Signs Phase One China Trade Deal
[5] Fed Opens Door to Rate Cuts Amidst Trade Tensions and Global Slowdown
The ongoing U.S.-China trade dispute has put the Community policy for the economic and monetary union in concern, as escalating tensions between the two nations could have a significant impact on global finance and business. Amidst the trade standoff, the monetary union of the European Union could face potential implications, considering the interconnected nature of the global economy.
