Economy

Wall Street set to open lower as trade tensions weigh

Wall Street set to open lower as trade tensions weigh”

Some notable stocks that saw a sharp drop include Goldman Sachs (GS), which fell 2.86%, and Uber (UBER), which dropped 3.98%, by 11:55 a.m. ET.

Asian stock markets were mostly lower Tuesday after investor jitters over U.S.

The Dow Jones Industrial Average fell 285.26 points, or 1.1%, to 26,118.02, while the S&P 500 index dropped 20.19 points, or 0.7% to 2,906.27.

In an escalation of their trade war, the United States on Sunday began imposing 15% tariffs on a variety of Chinese goods, and China began imposing new duties on USA crude oil.

The S&P/TSX Composite Index was down about 70 points, or 0.43 per cent.

Utilities held up well, as did with makers of consumer products such as Procter & Gamble.

USA casino operators felt the brunt of slowing economic growth in China as gambling hub Macau posted an 8.6% decline in August casino revenue, sending shares of Wynn Resorts Ltd (WYNN.O), Las Vegas Sands Corp (LVS.N) and MGM Resorts International (MGM.N) down between 1.6% and 2%.

Utilities wobbled between small gains and losses, while the price of gold rose 1.5 per cent.

The weak data also pushed the benchmark 10-year yield to its lowest level since July 2016.

Shares of Ulta Beauty (ULTA.O) fell 1.6%, extending a slide from Friday, after Citigroup cut the rating on the cosmetics retailer's stock to "neutral".

A monthly survey on manufacturing activity by the Institute for Supply Management, due at 10 a.m. ET, is expected to shed some light on the impact of the trade war on the US industrial sector. The lower bond yields weighed on banks.

The Institute of Supply Management's manufacturing index for August came in at 49.1 - its lowest level since January 2016, and worse than the 51 number expected.

The ISM data was "weaker than expected, with the market impact of the 2.1-percentage-point drop likely magnified by the level dropping below the 50 mark", wrote Jim O'Sullivan chief US economists with High Frequency Economics, in a note to clients. Any reading below 50 indicates contraction.

Businesses are increasingly wary of investing and expanding because of uncertainty surrounding the U.S.

A global softening in demand, worsened by the increasingly high-risk trade war between the USA and China, appears to be hurting American manufacturers.

Investors have been anxious that the trade war and a slowing global economy could tip the US into a recession. A bank statement cited risks to global growth from the U.S.

The yield on the 10-year Treasury has been hovering near or below that of the 2-year Treasury yield, which on Tuesday dropped to 1.46% from 1.49% late Friday.

Declining issues outnumbered advancers for a 1.94-to-1 ratio on the NYSE and for a 2.57-to-1 ratio on the Nasdaq. The company also topped analysts' revenue expectations. Chevron dipped 1.8 per cent.

The dollar fell to 106.03 Japanese yen from 106.19 yen on Monday. The euro declined to $1.0948 from $1.0969.

OVERSEAS: European stocks fell broadly and the British pound dropped to its lowest level against the USA dollar in 34 years - excluding a brief "flash crash" in 2016 that may have been caused by technical glitches - as the United Kingdom faces a potentially chaotic exit from the European Union.

Meanwhile, concerns over Britain's exit from the European Union under new Prime Minister Boris Johnson have increased.



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