US STOCKS-Trade tensions weigh on Wall St, hopes of rate cut limit losses

US STOCKS-Trade tensions weigh on Wall St, hopes of rate cut limit losses

Reuters  | Jun 12, 2019 21:10

US STOCKS-Trade tensions weigh on Wall St, hopes of rate cut limit losses

(For a live blog on the U.S. stock market, click LIVE/ or type LIVE/ in a news window.)

* U.S. consumer prices barely rise in May

* Banks fall as prospects of rate cut rise

* Expectations low for Trump-Xi talks, preparations limited

* Indexes down: Dow 0.18%, S&P 0.23%, Nasdaq 0.43%

(Updates prices, comments)

By Shreyashi Sanyal

June 12 (Reuters) - Wall Street's main indexes dropped on Wednesday on worries of a prolonged U.S.-China trade war after Washington hardened its stance, but losses were cushioned by a muted reading on inflation that backed the case for an interest rate cut.

Data showed consumer prices edged up 0.1% in May, in line with expectations of economists polled by Reuters and pointed to moderate inflation. Excluding the volatile food and energy components, the CPI nudged up 0.1%. numbers will add some fuel to the case made by the markets and many analysts that the Fed should cut rates," said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.

Fresh worries erupted on the trade front after President Donald Trump said he was holding up a deal with China and had no interest in moving ahead unless Beijing agrees to four or five major points. under three weeks to go before proposed talks between the United States and Chinese leaders, sources say there has been little preparation for a meeting even as the health of the world economy is at stake. is a market that would love to see us get back to the negotiating table. The longer these trade tensions last, the most damage it'll do to the economy, and therefore to earnings," said Art Hogan, chief market strategist at National Securities in New York.

Hopes that the Federal Reserve will act to counter a slowing global economy due to escalating trade war have spurred a rally in stocks this month, with the S&P 500 index .SPX up 4.6% so far in June.

Fed policymakers will meet on June 18-19 and markets have priced in at least two rate cuts by the end of 2019. Fed fund futures FEDWATCH imply around an 80% chance of an easing as soon as July.

Banking stocks .SPXBK , which tend to benefit from a higher interest rate environment, slipped 1.05%. The broader financial sector .SPSY fell 0.8%.

At 11:18 a.m. ET the Dow Jones Industrial Average .DJI was down 48.15 points, or 0.18%, at 26,000.36, the S&P 500 .SPX was down 6.50 points, or 0.23%, at 2,879.22 and the Nasdaq Composite .IXIC was down 33.78 points, or 0.43%, at 7,788.79.

Semiconductor stocks, which get a sizeable portion of revenue from China, declined, with the Philadelphia Semiconductor index .SOX dropping 1.86%.

Micron Technology Inc MU.O , Applied Materials Inc AMAT.O and Lam Research Corp LRCX.O fell between 4% and 5% and were top losers among S&P 500 companies.

Adding pressure on the main indexes were declines in shares of oil majors Exxon Mobil Corp (NYSE:XOM) XOM.N and Chevron Corp (NYSE:CVX) CVX.N as crude prices fell nearly 2%. The energy index .SPNY fell 0.94%, the most among the 11 S&P sector. O/R

Declining issues outnumbered advancers for a 1.32-to-1 ratio on the NYSE and a 1.40-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and two new lows, while the Nasdaq recorded 19 new highs and 70 new lows.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes