The Dow Jones Industrial Average skidded by 230 points on Thursday after trade tensions between the U.S. and China resurfaced on doubts about a trade deal being reached.
The S&P 500 index slipped by 16.85 points or 0.55%, while the Nasdaq Composite edged lower by 34.29 points or 0.41%.
On Wednesday evening, Bloomberg Television reported that China has doubts it can reach a long-term agreement with U.S. President Donald Trump.
On the other hand, Trump tweeted on Thursday that the U.S. and China will sign an agreement. Additionally, Trump also mentioned the two parties are working on selecting a new location for the signing of “phase one” of a trade agreement after the Chilean government had canceled a meeting where Trump was expected to meet with Chinese President Xi Jingping.
“China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances. The new location will be announced soon. President Xi and President Trump will do signing!” tweeted Trump.
U.S. markets also edged lower after the Federal Reserve cut interest rates for the third time in a row on Wednesday. The Feds slashed its benchmark fed funds rate by 0.25% to between 1.50% and 1.75%.
The concerns around trade tensions and the Federal Reserve’s rate cut sparked fear once again about a slowing global economy, adding onto Thursday’s losses.
The trade fears suppressed upbeat earnings reported by Apple (NASDAQ: AAPL) and Facebook (NASDAQ: FB). Apple shares were trading 2% higher Thursday afternoon, while Facebook shares were trading 2.2% higher.
“Trade headlines continue to offset solid earnings and optimism from the Fed and rightfully so because the global economy is really struggling right now and most of it has to do with trade,” said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada.