Fears of new trade tensions with China are causing the main indices to fall.
Wall Street’s main indexes fell as technology stocks rallied, adding to losses triggered by fears of renewed trade tensions.
After a mixed day in European stock markets, losses on Wall Street were widespread on Thursday, with energy being the only one of 11 industrial sectors to advance in the S&P 500.
The Dow, which has broken records over the past three days, led the major indexes lower with a 1.3 percent drop.
“It doesn’t take much of an excuse for the markets to take some profits when they’ve performed so well,” said Art Hogan, chief market strategist at B Riley Wealth.
Market watchers have fixated for days on the “overbought” state of technology stocks, following outsized gains in artificial intelligence stocks so far in 2024.
The “VIX” volatility index rose around 10 percent, in a move that some linked to growing political pressure on US President Joe Biden to abandon the 2024 campaign.
Peter Cardillo of Spartan Capital said speculation about Biden “could create some near-term election anxiety” after more investors expected a Donald Trump victory following the June presidential debate.
Europe’s main stock markets ended the day mixed, with London receiving a boost from the previous day’s rise in oil prices.
Oil prices rose 2 percent on Wednesday following signs of strengthening oil demand in top consumer the United States, although the market stabilized on Thursday.
The dollar firmed after losses caused by growing expectations that the US Federal Reserve would cut interest rates at least once this year.
As expected, the European Central Bank (ECB) on Thursday held its key interest rates steady as it waits for firm indications that consumer price increases are stable before reducing borrowing costs again.
The bank kept the key deposit rate at 3.75 percent after the first cut in June ended a series of unprecedented increases to control runaway inflation.
But ECB chief Christine Lagarde said there was no pre-determined rate path and that the decision at the September meeting was “completely open” and would depend on the data.
On Wednesday, technology companies took a hit after a report claimed that US President Joe Biden would target companies that supply China with essential semiconductor technology.
Biden is reportedly considering imposing strict restrictions on companies such as Tokyo Electron and Dutch firm ASML if they continue to allow Beijing access to their chip technology.
Sentiment was also hurt by Trump’s comments that key chip supplier Taiwan – home to TSMC and other major producers – should pay the US for helping the island defend itself militarily against China.
This story originally appeared on Aljazeera.com read the full story
