- Contradicting headlines on the U.S. trade policy cause stocks to erase early gains.
- Losses in tech shares force Nasdaq Composite to lose more than 1%.
- Energy continues to outperform other sectors.
Although it looked like major equity indexes were on track to record solid gains on Wednesday following a positive start to the day, they failed to stay in the positive territory as investors remained focused on the uncertainties surrounding the United States’ trade policy.
Earlier today, a senior Trump administration official reportedly said that President Trump wouldn’t invoke the national emergency law on China and added that he would back down on his decision of investment restrictions on technology firms. However, later in the session, White House economic advisor Larry Kudlow argued that Trump wouldn’t retreat on China.
“Nothing today came out other than commentary from the administration. The problems that we’re dealing with in the market isn’t going to be allayed by a couple of interviews. We’re going to need significant commentary from the President, trade advisers about where this is all going,” Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee, told Reuters.
As we have seen in the previous sessions, the technology sector suffered the most from these developments with the S&P 500 Information Technology Index (SPLRCT) dropping 1.5% on the day.
On the other hand, crude oil prices continued to rise after the EIA reported a large decrease in U.S. crude stocks and the S&P 500 Energy Index added 1.35%.
The Dow Jones Industrial Average dropped 165.52 points, or 0.68%, to 24,117.59, the S&P 500 erased 23.43 points, or 0.86%, to 2,699.63, and the tech-heavy Nasdaq Composite lost 116.54 points, or 1.54%, to 7,445.09.
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