Wall Street stocks have ended lower, capping a day of heavy trading with investors mostly pulling back from initial concerns over an escalating trade dispute between the United States and China.
US President Donald Trump unveiled an initial list of strategically important goods that would be subject to a 25 per cent tariff effective July 6, a move China’s commerce ministry called ‘a threat to China’s economic interest and security’.
China issued its own list of US imports subject to tariffs, targeting soybeans, aircraft, autos and chemicals.
Since early May, the two countries have held several rounds of talks but have yet to reach a deal, as the United States pressures China to narrow a $US375 billion trade deficit.
‘A lot of people may have over-reacted at the very beginning of the day,’ said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.
‘I don’t think a trade war is going to be inevitable,’ Pavlik said. ‘I think (the president is) posturing, I think he’s chest-pounding, I think he’s doing exactly what he thinks he got elected to do.’
Friday also marked ‘quadruple witching day’, the quarterly simultaneous expiration of US options and futures contracts, which tends to boost trading volume as investors replace expiring positions.
Volume hit the highest point since February 8, when the S&P 500 sank to its lowest level of the year so far.
Companies considered the most sensitive to trade war worries were among the day’s biggest drags. Shares of Boeing, the single-largest US exporter to China, fell 1.3 per cent, while tariff-sensitive construction equipment-maker Caterpillar and chemical company DowDupont were down 2.0 per cent and 0.9 per cent, respectively.
The Dow Jones Industrial Average fell 84.83 points, or 0.34 per cent, to 25,090.48, the S&P 500 lost 3.07 points, or 0.11 per cent, to 2,779.42 and the Nasdaq Composite dropped 14.66 points, or 0.19 per cent, to 7,746.38.
For the week, the Dow was down 0.9 per cent while the S&P 500 rose 0.01 per cent and the Nasdaq gained 1.3 per cent, its fourth consecutive weekly advance.
Of the 11 major sectors of the S&P 500, six ended the day in negative territory.
The energy sector was the biggest percentage loser, down 2.1 per cent as oil prices tumbled more than 3 per cent ahead of next week’s OPEC meeting.
Declining issues outnumbered advancing ones on the NYSE by a 1.21-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favoured advancers.
The S&P 500 posted 23 new 52-week highs and four new lows; the Nasdaq Composite recorded 152 new highs and 40 new lows.
Volume on US exchanges was 9.9 billion shares, compared to the 6.9 billion average for the full session over the past 20 trading days.