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Wall Street’s major indices mostly fell on Wednesday (July 17) as rising trade tensions with China impacted tech stocks and speculation of a US interest rate cut pushed gold to a record high, while the Dow managed a modest gain amid mixed corporate earnings reports read more
 "Nasdaq tumbles amid talk of trade restrictions on China; Dow Jones bucks trend")
Wall Street's main indices mostly fell on Wednesday (July 17) as tech stocks suffered from heightened trade tensions with China and the prospect of a US interest rate cut. Reuters
Wall Street’s key indices mostly declined on Wednesday (July 17) as escalating trade tensions with China negatively impacted tech stocks.
The increasing likelihood of a US interest rate cut also exerted downward pressure on the dollar, which in turn boosted gold—a safe-haven asset priced in the currency—to another record high.
“Separately, a remark from former President Trump that Taiwan should be paying the U.S. for its defense has created some geopolitical angst that is also weighing on the semiconductor group,” said market analyst Patrick O’Hare of Briefing.com.
The S&P 500 dropped 78.93 points, closing at 5,588.27. Meanwhile, the Dow Jones Industrial Average added 243.60 points to reach 41,198.08, and the Nasdaq Composite fell 512.42 points, ending the day at 17,996.92.
Despite recent underperformance compared to the other major indices, the Dow managed to secure a modest gain, marking its third consecutive record close.
Market movers
Reports that the Biden administration is contemplating stringent trade restrictions against China led to a 6.8 per cent decline in microchip stocks, marking the Philadelphia SE Semiconductor Index’s steepest one-day drop since March 2020.
A downturn in the “Magnificent 7” group of momentum stocks, including Nvidia and Apple, pulled the Nasdaq down by 2.8 per cent. The benchmark S&P 500 also slid by 1.4 per cent.
Johnson & Johnson, which has struggled this year, rose by 3.7 per cent after surpassing analysts’ profit forecasts for the latest quarter, contributing significantly to the Dow’s rise.
US Bancorp, another laggard this year, surged by 4.6 per cent after reporting better-than-expected profit and revenue figures.
On the downside, Five Below, a retailer specializing in low-cost products, plunged by 25.1 per cent. The decline followed the resignation of CEO Joel Anderson and a disappointing profit forecast for the second quarter.
Spirit Airlines saw a 10.8 per cent drop after the budget carrier revised its revenue forecast for the second quarter downward, citing lower-than-expected earnings from ancillary fees.
Bond market dynamics
In the bond market, the yield on the 10-year Treasury note dipped to 4.14 per cent from 4.16 per cent late Tuesday (July 16).
With inputs from agencies
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English (US) ·