Stock Market News For May 23, 2018

Markets ended lower on Tuesday erasing early gains, after President Donald Trump said that he wasn’t satisfied with the progress of United States-China trade talks. Moreover, Trump also said that the highly awaited summit between the United States and North Korea might not happen at all.

Meanwhile, the White House said that in order to get into any fresh nuclear deal with the United States, Iran needs to stop enriching uranium and withdraw support to militant groups in the Middle East. This saw stocks plummeting further, with all three major indexes ending the day in negative territory.

The Dow Jones Industrial Average (DJI) declined 0.7% to close at 24,834.41. The S&P 500 lost 0.3% to close at 2,724.44. The Nasdaq Composite Index closed at 7,378.46, declining 0.2%. A total of 6.2 billion shares were traded on Monday, lower than the last 20-session average of 6.6 billion shares. Decliners outnumbered advancers on the NYSE by a 1.49-to-1 ratio. On Nasdaq, a 1.33-to-1 ratio favored declining issues.

How did the Benchmarks Perform?

The Dow lost 178.88 points after closing above 25,000 for the first time a day earlier. Shares of Caterpillar (NYSE:CAT) , United Technologies (NYSE:UTX) and Boeing (NYSE:BA) witnessed a significant decline. The tech-heavy Nasdaq lost 15.58 points.

The S&P 500 lost 8.57 points, with the Industrial Select Sector SPDR Fund (XLI) and Materials Select Sector SPDR Fund (XLB) losing 1.3% and 0.8%, respectively.

U.S. China Trade War Fears Haunt Again

Markets suffered on Tuesday after Trump said that he was not satisfied with the progress of United States-China trade talks. Trade war fears have been plaguing markets for quite some time now. However, the tension somewhat eased on Monday after two countries took to negotiations to avoid a possible trade war. This saw shares rallying on Monday.

The positive sentiment saw markets opening higher on Tuesday. However, the early gains were erased after Trump’s comment, which saw stocks taking a hit once again. Industrial stocks were the worst performer on Tuesday. Shares of Boeing, Caterpillar and United Technologies declined 2.5%, 1.7% and 0.4%, respectively. Boeing has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (String Buy) stocks here.

However, auto stocks gained after China announced import duties on passenger cars will be reduced from 25% to 15%. This saw shares of Fiat Chrysler Automobiles N.V. (NYSE:F) , General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) 1.3%, 0.5% and 0.1%, respectively.

Geopolitical Tensions With North Korea, Iran Rise Again

Uncertainty surrounding the summit with North Korea’s premier Kim Jong Un is also growing. This further heightened on Tuesday after Trump said that the highly anticipated summit might not take place at all. He said, “Whether or not it happens, you'll be knowing pretty soon.” Trump and Kin Jong Un are scheduled to meet in Singapore on June 12. However, his comments on Tuesday, took its toll on markets once again.

Meanwhile, on Monday, the White House said that in order to start any fresh deal with the United States, Iran first needs to stop enriching its uranium. Additionally, the country would have to withdraw support from militant groups in the Middle East. Iran immediately rejected the demands, which further raised fears in the minds of investors, making stocks plummet.

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