Wall Street stocks opened firmly in the red amid the latest back and forth involving the United States and China on trade. But equities recovered somewhat following midday remarks from Fed Chair Jerome Powell.
Powell’s observation that US payroll gains have “slowed sharply” strengthened confidence the US central bank would cut interest rates later this month.
“In this less dynamic and somewhat softer labour market, the downside risks to employment appear to have risen,” Powell said.
Bourses earlier in Europe had also struggled to get out of the red, while Asian markets suffered losses following Monday’s pullback in the wake of US–China tensions.
“There is a whiff of risk aversion about financial markets today,” said Kathleen Brooks, research director at XTB. “The global stock market uptrend is facing a little more resistance on the upside.”
Markets were unsettled after China imposed sanctions on five American subsidiaries of South Korean shipbuilder Hanwha Ocean, accusing them of supporting a US government investigation into the shipping industry.
JPMorgan Chase finished down 1.9 percent despite reporting higher profits in results that topped analyst expectations. However, the bank disclosed a US$170 million hit from its exposure to Tricolor, a subprime auto lending company that went bankrupt.
Goldman Sachs dropped 2 percent after reporting higher profits, but Citigroup jumped 3.9 percent and Wells Fargo surged 7.2 percent.
The S&P 500 lost 0.2 percent to 6,644, while the Nasdaq fell 0.8 percent to 22,521. The Dow Jones, however, rose 0.4 percent, to 46,270. (AFP)
