On November 20, 2018, global markets opened the week under pressure as investors reacted to signs of softer iPhone demand and a fresh escalation in U.S.-China trade tensions.
Apple Inc and suppliers tied to the company were among the biggest drags on Wall Street after The Wall Street Journal reported that Apple had cut production orders in recent weeks for iPhone models launched in September. The selloff helped push the S&P 500 down 1.7 percent.
Trade friction added to the unease. At an Asia-Pacific Economic Cooperative meeting in Papua New Guinea over the weekend, leaders failed to agree on a communique, the first such breakdown in the group’s history. U.S. Vice President Mike Pence said on Saturday that there would be no end to U.S. tariffs on $250 billion of Chinese goods until China changed its ways.
“That APEC was unable to issue a final statement clearly indicates that China versus the rest of the world isn’t just about the United States,” said Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, Massachusetts. “It’s a widening of trade concerns that are already rattling markets.”
By the close, the Dow Jones Industrial Average had fallen 395.78 points, or 1.56 percent, to 25,017.44. The S&P 500 lost 45.54 points, or 1.66 percent, to 2,690.73, while the Nasdaq Composite dropped 219.40 points, or 3.03 percent, to 7,028.48. MSCI’s gauge of stocks across the globe still managed a 0.30 percent gain.
Mixed signals from the Federal Reserve also shaped trading. Policymakers had recently raised concern about a possible global slowdown, which led some investors to question how far the tightening cycle could continue. At the same time, New York Fed President John Williams said the central bank was still moving ahead with gradual rate increases as it worked toward a more normal policy stance.
Growth worries were reinforced by data from the National Association of Home Builders, which showed weakening sentiment in the U.S. housing market. The dollar index fell 0.3 percent to a two-week low, while the 10-year U.S. Treasury yield slipped to its lowest level in more than a month.
Benchmark 10-year notes last rose 3/32 in price to yield 3.0628 percent, down from 3.074 percent late on Friday. Gold gained 0.2 percent to $1,223.56 an ounce, helped by the softer dollar.
Oil prices also edged higher on support from a reported drawdown in U.S. inventories, possible European Union sanctions on Iran and talk of OPEC production cuts. Brent crude futures settled at $66.79 a barrel, up 3 cents, while U.S. crude futures finished at $56.76 a barrel, up 30 cents.
Reporting by April Joyner; additional reporting by Marc Jones in London; editing by Chizu Nomiyama and Dan Grebler.
