Wall Street stalls; S&P 500 dips after 5-day winning streak
NEW YORK (AP) — Wall Street is stalling on Friday, as a whirlwind of worries about rising U.S.-China tensions and whether Congress can deliver more aid for the economy threaten to halt its big run.
The S&P 500 was edging 0.1% lower in early trading, after a five-day winning streak had brought it back within 1.1% of its record for the first time since February. The Dow Jones Industrial Average was down 73 points, or 0.3%, at 27,317, as of 9:40 a.m. Eastern time, and the Nasdaq composite pulled 0.1% back from its record.
Markets around the world got a small boost before trading began on U.S. stock markets when a report showed that the U.S. job market strengthened more last month than economists expected. But the bump for U.S. Treasury yields and European stocks proved short-lived.
It’s a busy day for markets, with investors also focused on Capitol Hill, where Congress and White House officials have been negotiating on a hoped-for deal on more aid for the economy. A marathon meeting Thursday left both sides still far apart on key issues, and they both said the future of talks is uncertain.
Investors say it’s crucial that Washington pump more money into the economy, which has shown signs of improvements since the spring but is still hobbling amid worries about a resurgence in coronavirus counts. Even though Friday's jobs report was healthier than the market expected, it also showed that hiring is already slowing following two months of acceleration and remains far below where it was before the pandemic.
Trump is considering executive orders to address some of the issues if Congress doesn’t reach a deal, such as evictions and unemployment insurance, but they appear unlikely to have much impact.
Much of the market’s focus was also on moves Trump did make Thursday night: He ordered a sweeping but vague ban on dealings with the Chinese owners of popular social media apps TikTok and WeChat on security grounds.
China’s government criticized the move as “political manipulation.”
Tensions between the world’s two largest economies have been escalating for years, highlighted by the U.S.-China trade war that seemed to have reached at least a temporary truce early this year. But tough talk has continued to flow, with Trump keying in on TikTok in particular recently.
U.S. technology stocks, which tend to do lots of business in China, were the heaviest weights on the S&P 500 and dipped 0.6%. Energy producers and raw-material companies were also particularly weak.
The yield on the 10-year Treasury dipped to 0.52% from 0.53% late Thursday.
Gold dipped, a rare step back following its record-setting run as investors seek safety amid a weak global economy, trade tensions and low interest rates. It dipped 0.7% to $2.055.30 per ounce.
Benchmark U.S. crude fell 1.5% to $41.33 per barrel. Brent crude, the international standard, lost 1.3% to $44.50.
In China, stocks in Shanghai lost 1%. The Hang Seng in Hong Kong dropped 1.6%, while Japan’s Nikkei 225 slipped 0.4% and South Korea’s Kospi added 0.4%.
In Europe, Germany’s DAX returned 0.4%, and France’s CAC 40 slipped 0.1%. The FTSE 100 in London dipped 0.1%.
AP Business Writer Yuri Kageyama contributed.