Stocks declined along with bond yields and oil prices Thursday amid fresh concerns on the trade front. The major averages gave back a strong morning advance after President Trump said the U.S. will impose a 10% tariff on $300 billion worth of Chinese imports on September 1st, citing China’s failure to increase U.S. agricultural purchases, among other factors. The Dow fell 281 points, while the S&P 500 dropped 0.9% after climbing as much as 1% earlier in the session. The Nasdaq Composite declined 0.8%.
Investors also digested mixed updates on the data front. The Institute for Supply Management reported U.S. manufacturing PMI slipped to 51.2 in July, below expectations of 52.0, and the slowest pace of expansion since August 2016. Treasuries continued yesterday’s post-Fed rally following the report, with the yield on the 10-year note sliding 12 basis points to 1.89%, the lowest level since October 2016. Gold prices also rallied, with the perceived safe-haven asset jumping more than 1.1% to close at $1442.30/ounce.
Eight of 11 S&P 500 sectors declined Thursday with Energy shares slipping more than 2.0% amid a fall in oil prices. WTI crude retreated 7.9% to $53.95/barrel, the worst single-session performance in four years. The traditionally defensive Utilities, Real Estate, and Health Care sectors were the only groups to finish the session in positive territory. In earnings, Qualcomm shed 2.7% after missing Wall Street revenue estimates and providing disappointing guidance. Kellogg bucked the downtrend, rising more than 9% after announcing better than expected organic sales growth.