Stocks went down Friday, revealing a violent week as investors flickered between risky and safe assets as they reacted to the trade war and the new Washington-Beijing currency match.
President Trump on Friday morning suggested a meeting with China on trade could be canceled, putting pressure on equities. The S&P 500 fell 0.7% on Friday, while the technology-heavy Nasdaq Composite fell 0.3%. The Dow Jones Industrial Average lost about 80 points, or 1%. After all of the last days big swings, all three main indices closed the week with modest drops of less than 1%.
"We're not ready to make a deal, but we'll see what happens," Mr. Trump told reporters Friday morning. "We'll see if China holds our meeting in September or not."
Markets around the world have fluctuated this week after relocations from China's central bank triggered fears that the US-US trade deal could spread to a new front in the foreign-exchange markets.
What began as a route on Monday ̵
For much of this year, shares have rebounded to expectations that the US central bank would cut interest rates, raising the Dow to record highs in July. But after the Fed delivered its much-anticipated interest rate cut last week, stocks fell as Washington-Beijing trade conflict worsened and the US central bank appeared to signal that it could hold back from further monetary easing. .
Cocktails of trade tensions and interest rate cuts have led to a stock market that has risen about 17% so far today, but it's also up just over 2% from where it was a year ago.
At the heart of investors' concerns is that the trade war could push the US and world economies to a decline. In a quick-fire series of events this month, Trump ordered US $ 300 billion in Chinese import tariffs to come into effect on September 1, Beijing said it had halted US agricultural imports and allowed the yuan to weaken, and the US Treasury appointed China and currency manipulator.
In addition to worries about global decline, the UK reported on Friday that the gross domestic product unexpectedly contracted in the second quarter as Brexit concerns took its toll.
"There are far more downturns," said Jack Janasiewicz, a portfolio strategist at Natixis Investment Managers. "2008 remains healthy in many investors, and people are quick to take the risk."
Investors have piled into securities such as US government bonds and gold amid the recent turmoil. The yield on the 10-year US Treasury bond hit its lowest level several years earlier this week. It was recently 1.724%, up from 1.710% on Thursday, after the chopped trade. Yields move in the opposite direction as prices.
Gold futures were little changed to $ 509.80 per troy ounce on Friday, after settling on a six-year high on Wednesday.
The yuan remained stable Friday, but the dollar's offshore exchange rate was weaker than a previous key level, with currency trading of 7.08 against the dollar.
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"The prospect of both governments reaching measures they had not previously used was very disappointing for the markets this week," said Paul Christopher, head of the Wells Fargo Investment Institute global market strategy.
In the United States, shares in Uber Technologies fell 6% after the ride reported a larger quarterly loss than expected after markets near Thursday.
In Europe, the Stoxx 600 benchmark index fell 0.8%, while the British pound moved several years low against the euro and the dollar. Italian government bonds sold strongly, pushing returns sharply higher after Matteo Salvini, the leader of the right-wing extremist party, attempted to trigger elections.
China's Shanghai Composite Index fell 0.7% after economic data on Friday showed that producer prices have fallen in deflation for the first time in three years as worries about the US trade war raised demand.
U.S. Crude oil gained 3.7% to $ 54.49 a barrel. The WSJ Dollar Index, which measures the US currency against a basket of 16 others, slipped below 0.1%.
—Caitlin Ostroff and Anna Isaac contributed to this article.
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