Stocks closed Tuesday’s trading session mixed, with the day’s results largely driven by a ratcheting upward of trade threats and maneuvers between the US and China.
The S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) lost 0.2% and 0.8%, respectively, while the Dow Jones Industrial Average (^DJI) managed to gain 0.4%, or just over 200 points, to stay in the green.
Also in focus were comments from Federal Reserve chair Jerome Powell, who said “the downside risks to employment appear to have risen” in a speech in Philadelphia at the National Association for Business Economics.
The largest focus throughout the trading session was on escalations in a trade war between Washington and Beijing that only seems to be getting hotter. Taking aim at US maritime trade, China placed sanctions on five US-linked units of South Korean shipbuilding firm Hanwha Ocean, effectively barring Chinese companies from doing business with them.
The two countries also began charging special port fees on one another’s vessels on Tuesday. Trump and Chinese leader Xi Jinping remain scheduled to meet later this month, US Trade Representative Jamieson Greer said.
Markets dipped once more right before the closing bell after a Truth Social post from Trump threatened a cessation in US purchases of Chinese cooking oil products, dubbing China’s stoppage in US soybean purchases an “Economically Hostile Act.”
“I believe that China purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers, is an Economically Hostile Act. We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution,” the president wrote on Truth Social.
In more positive news for the market, the country’s largest banks began reporting earnings Tuesday morning, with JPMorgan Chase (JPM), Citigroup (C), Goldman Sachs (GS), and Wells Fargo (WFC) all posting largely stellar results.