U.S. stocks descent continues as trade war tensions worsen after the market reopens following a long weekend. Major benchmarks capitulated as investors’ anxiety over U.S.-China trade war blurs windows of negotiation.
The market reopens Tuesday following the Memorial Day holiday, and the numbers fell significantly. The Dow Jones Industrial Average DJIA, -0.93% shed 237.92 points, or 0.9%, to 25,347.77, while the S&P 500 index SPX, -0.84% fell 23.67 points, or 0.8%, to 2,802.39. The Nasdaq Composite Index COMP, -0.39% dropped 29.66 points, or 0.4%, to 7,607.35.
While stocks are higher as the market closes on Friday, the U.S. financial markets booked losses for the week, extending the Dow’s weekly losing streak to five, its longest since June 2011. The Dow saw a 0.7% weekly fall, while the S&P 500 logged a 1.2% retreat and the Nasdaq Composite gave up 2.3%.
Many analysts agree that since the numbers were looking positive for the year, the market fell significantly on May following the escalated tension between Washington and Beijing over tariff. The situation was even worsened by Trump’s decision to prevent the sale of consumer goods from China’s Huawei that have prompted American partners to abandon business with the Chinese company.
“They (China) would like to make a deal. We’re not ready to make a deal,” Trump said, according to Bloomberg. He added that tariffs on Chinese products could go up “very substantially.”
“We’ve been with a short-term negative trading bias since ‘The Tweet’ of a few Sundays ago, and that kick in the pants has yet to produce anything for bulls to again celebrate,” said Rick Bensignor of Bensignor Investment Strategies, in a note, referring to Trump’s May 5 tweet consummating threats to raise tariffs on $200 billion of Chinese goods to 25%.
Since then, the S&P 500 “has been rangebound, and hasn’t been able to progress back above 2,890 nor break to new lows beneath 2,801,” Bensignor said.