U.S. stocks ended lower on Tuesday as investors weighed tensions between the United States and China on the front of the phase one trade deal. Comments from a top U.S. infectious disease expert regarding reopening the country’s economy also marred investors’ confidence.
The three major indices — the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite — closed in the red on Tuesday. The Dow Jones Industrial Average closed at 23,764.78 after declining 1.9%, the broader S&P 500 reached 2,870.12 after decreasing 2.1% and the tech-laden Nasdaq Composite hit 9,002.55 after inching 2.1% lower. The fear-gauge CBOE Volatility Index (VIX) rose 14.2% to close at 31.49 on May 12.
Trump Against Renegotiating U.S.-China Phase One Trade Deal
President Donald Trump said on May 11 that he was “not interested” to renegotiate the U.S.-China phase one trade deal that was signed in January this year. Trump’s comments came after report by a Chinese state-run newspaper surfaced of some government advisers in Beijing urging fresh trade talks between the countries and possibly invalidating the agreement.
Trump told a White House press briefing that he wanted to see if Beijing lived up to the trade deal to drastically raise its purchases of American goods. After the report was published on Monday, Chinese importers purchased about 240,000 tonnes of U.S. soybeans for shipments beginning in July.
Infectious Diseases Expert Warns of New Coronavirus Cases
Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, warned the Senate that the country may face “needless suffering and death” if the economy reopens too early during the pandemic. He said the disease wasn’t in control yet and any treatment or vaccine for the disease was unlikely to be available before late August or early September.
To add to investors’ worries, new clusters of coronavirus infections were reported in countries such as China, South Korea and Germany where social distancing measures had been lifted. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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