The S&P 500 Index ($SPX) (SPY) today is down -0.99%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.86%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.37%. December E-mini S&P futures (ESZ25) are down -1.00%, and December E-mini Nasdaq futures (NQZ25) are down -1.42%.
Stock indexes are retreating today as the US-China trade conflict escalates further after China sanctioned five US units of South Korean shipbuilder Hanwha Ocean Co., in the latest in a series of tit-for-tat moves. Both countries have slapped special port fees on each other’s vessels. The moves have implications for the global economy, as vessels are responsible for moving more than 80% of international trade.
The escalation of trade tensions has sparked buying of precious metals as a haven today, as gold and silver rallied to new record highs. Also, global bond markets are the recipients of haven demand from the trade turmoil as bond yields declined worldwide. The 10-year German bund yield dropped to a 3.25-month low of 2.58% and the 10-year T-note yield fell to a 3.5-week low of 4.00%.
Today’s minor economic news showed that the US Sep NFIB small business optimism index fell -2.0 to 98.8, weaker than expectations of 100.6.
Most stock indexes rallied to record highs last week on optimism that growth in the AI sector and spending on artificial intelligence will translate into corporate profits. Stocks are also underpinned by hopes that a resilient US economy and additional Fed easing will continue to support the economy.
The shutdown of the US government continues, weighing on market sentiment and delaying key economic reports. The government shutdown means delays in the release of government reports, including the last two weeks of weekly initial unemployment claims, the Aug US trade report, and the Sep nonfarm payrolls report. Last Friday, the Bureau of Labor Statistics (BLS) said that it will release the September consumer price report on October 24 if the government shutdown continues into Wednesday, when the Sep CPI report is…
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