By CCN Markets: The Dow’s three-day recovery ran smack into a wall on Tuesday, as the stock market struggled to complete the long journey back from last week’s vicious 800 point DJIA plunge.
Meanwhile, Beijing capped simmering optimism about US-China trade relations by sniping at President Trump through a state-run media mouthpiece.
All of Wall Street’s major indices stumbled heading toward the closing bell. As of 2:23 pm ET, The Dow Jones Industrial Average had lost 97.08 points, or 0.37%. The DJIA last traded at 26,038.71.
The S&P 500 fell further, losing 15.28 points or 0.52% to settle at 2,908.37. Ten of 11 primary sectors recorded losses.
The Nasdaq’s 0.48% pullback dropped the tech-heavy index back below the 8,000 mark to 7,964.68.
The mood on Wall Street took a somber turn this morning, a stark change from the conviction that had seen a resurgent Dow climb more than 650 points since sinking below 25,500 on August 14.
One catalyst for the recovery had been improvements in the outlook for US-China trade negotiations.
That outlook soured on Tuesday after the People’s Daily – a state-run newspaper in China known as the Communist Party’s mouthpiece – warned President Trump not to “play the Hong Kong card” if he hopes to make further progress toward a trade deal.
“Making a fuss about Hong Kong will not be helpful to economic and trade negotiations between China and the US,” the commentary said, according to a South China Morning Post translation. “They would be naive in thinking China would make concessions if they played the Hong Kong card.”
The commentary also warned that China would “take countermeasures” to address what it perceives as “political intimidation from the Trump administration.
“It would be much harder for me to sign a deal if he [Chinese President Xi Jinping] did something violent in Hong Kong,” Trump said on August 17. “I’d like to see that worked out in a humanitarian fashion.”
Echoing Trump’s comments, Secretary of State Mike Pompeo told CNBC this morning that “something like Tiananmen Square” would “make it more difficult” for the White House to negotiate a trade deal with Beijing.
Last modified: August 20, 2019 14:25 UTC