Markets closed in the red as investors keenly followed the latest developments on the Sino-U.S. trade war front. President Trump stated that he would only have a trade deal with China if the country goes back to the original terms of the deal. Meanwhile, the Dow posted back-to-back losses for the first time in this month. Also, the tech shares weighed on both the S&P 500 and the Nasdaq.
The Dow Jones Industrial Average (DJI) decreased 0.2%, to close at 26,004.83. The S&P 500 decreased 0.2% to close at 2,879.84. The tech-laden Nasdaq Composite Index closed at 7,792.72, losing 0.4%. The fear-gauge CBOE Volatility Index (VIX) decreased 0.8% to close at 15.85. Decliners outnumbered advancers on the NYSE by a 1.20-to-1 ratio. On Nasdaq, a 1.07-to-1 ratio favored declining issues.
How Did the Benchmarks Perform?
The Dow declined 43.7 points to close in the red. Losses for the 30-stock index were broad based, led by a dip in the shares of Goldman Sachs (GS - Free Report) and Cisco (CSCO - Free Report) , which declined 2.3% and 2.2%, respectively. The Dow ended in the negative territory for the second consecutive session for the first time in June.
While Cisco carries a Zacks Rank #2 (Buy), Goldman Sachs has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 shed 5.9 points to end in negative territory. Of the 11 major sectors of the S&P 500, five ended in red, with energy and financials stocks leading the decliners. The Energy Select Sector SPDR Fund (XLE) and Financial Select Sector SPDR Fund (XLF) decreased 1.4% and 1%, respectively on Wednesday.
Meanwhile, the Nasdaq declined 29.9 points to close in the red. Losses for the Nasdaq were triggered by a dip in chip stocks which weighed on the broader technology sector. The VanEck Vectors Semiconductor ETF (SMH) declined 2.2% and the Lam Research Corporation (LRCX - Free Report) was down 5.3%.
Facebook Swoons, Weighs on the Broader Markets
Shares of tech-giant Facebook (FB - Free Report) dipped 1.7% after a report published on the Wall Street Journal stated that the social media company had uncovered several emails which connected its CEO Mark Zuckerberg to controversial privacy practices by the company.
The report also stated that employees at Facebook are concerned that such emails may create problems for the tech giant in the Federal Trade Commission’s (FTC) investigation. The FTC is currently probing whether it was a security failure which led to the Cambridge Analytica scandal. Such a turn of events also weighed on the tech stocks.
Trump Says he’s “Holding Up” the Trade Deal with China
Speaking to reporters in Rose Garden on Jun 1, President Donald Trump stated that he was not interested in a trade deal with China until the Asian country goes back to terms of the deal both the parties had agreed upon earlier.
Trump also stated that China wanted to make a “deal very badly” and it was him “holding up” the deal. He also stated that America will either have a “great deal with China or no deal at all. Such comments hurt the investor sentiment.
On the economic data front, the Bureau of Labor Statistics stated that the consumer price index increased a paltry 0.1% in May, in line with the consensus estimate. Further, the increase in cost of living in the country over the past 12 months fell to 1.8% in May. On the other hand, the Core CPI, which excludes food and energy prices, rose 2% in May.
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