Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average finished down Tuesday following reports the Trump Administration is putting visa restrictions on Chinese officials over abuses of Muslim minorities in the Xinjiang region
Wall Street Overview
Stocks finished lower Tuesday following late session reports the Trump Administration was putting visa restrictions on Chinese officials over abuses of Muslim minorities in the Xinjiang region just as the world's two largest economies prepare to hold trade talks later this week.
The Dow Jones Industrial Average ended down 314 points, or 1.19%, to 26,164 -- at its low for the day the blue-chip index was down 338 points. The S&P 500 dropped 1.56% and the Nasdaq, which had its worst day since August 23, fell 1.7%.
The State Department says the visa restrictions are aimed at officials "who are believed to be responsible for, or complicit in, the detention and abuse of Uighurs, Kazakhs, or other members of Muslim minority groups."
Secretary of State Mike Pompeo called upon China to "end its campaign of repression in Xinjiang, release all those arbitrarily detained, and cease efforts to coerce members of Chinese Muslim minority groups residing abroad to return to China to face an uncertain fate."
The move follows the Commerce Department's blacklist, unveiled late Monday, targeting China-based tech companies operating in the artificial intelligence space that were deemed to have been "implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance against" the minority groups.
Stocks had started to pare earlier losses after Federal Reserve Chairman Jerome Powell said during a speech in Denver that that he doesn't see why the 10-year-old U.S. economic expansion must give way to a recession any time soon.
Powell, speaking Tuesday afternoon at the annual meeting of the National Association for Business Economics in Denver, also said "increasing the supply of reserves or even maintaining a given level over time requires us to increase the size of our balance sheet."
"As we indicated in our March statement on balance sheet normalization, at some point, we will begin increasing our securities holdings to maintain an appropriate level of reserves," Powell said. "That time is upon us now."
However, the Dow began falling again on word of the visa restrictions. In addition, Bloomberg reported the White House was looking at ways to limit investment in Chinese firms by government pension funds.
"You couldn't have a worse way to start these talks," said Jim Cramer, TheStreet's founder, speaking on CNBC. "They're torpedoing the talks. Anybody that is hopeful, their hopes are dashed."
When asked Tuesday whether China would retaliate over the blacklist, China's foreign ministry spokesman Geng Shuang told Bloomberg, "Stay tuned." He also denied that his government abused human rights in the far west region of Xinjiang.
The trade war between the U.S. and China could mean the loss of around $700 billion for the global economy by 2020, said Kristalina Georgieva, the new chief of the International Monetary Fund, adding that "everyone loses in a trade war."
U.S.-listed shares for some of China's biggest companies fell after the Bloomberg report. Shares of Alibaba Holding (BABA) - Get Report , Baidu (BIDU) - Get Report and JD.com (JD) - Get Report closed lower Tuesday.
Bloomberg said the move, designed to restrict capital flows into China, was part of broader effort by the White House to tackle challenges linked to that country's capital markets.
High-definition video chip designer Ambarella (AMBA) - Get Report felt the impact of the trade war as one of the company's biggest customers, China's Hangzhou Hikvision, was blacklisted by the Trump administration. Shares were down 9.5% to $51.79.
Nike (NKE) - Get Report also felt the international heat, falling 1.5% to $91.75 as investors reacted to news that China's state-backed broadcaster, CCTV, said it would stop airing NBA games as the fallout over a tweet from the Houston Rockets' general manager supporting Hong Kong democracy protestors continues.
Domino's Pizza (DPZ) - Get Report rose 5% to $253.48 after the restaurant chain posted weaker-than-expected third quarter earnings Tuesday and disappointing same-store sales but said its carryout business is growing. Domino's Pizza is Real Money's Stock of the Day.
(BA) - Get Report fell slightly to $374.10 after The Wall Street Journal reported
that ongoing disputes between U.S. and European regulators could delay the return to service of the planemaker's troubled 737 MAX jet. Separately, the
company reported delivering just 26 aircraft in September, down from 87 it delivered in the same month a year ago.
Oracle (ORCL) - Get Report fell 1.4% to $54.05 after the cloud computing company said it would ramp-up hiring to challenge larger rivals such as Amazon (AMZN) - Get Report and Microsoft (MSFT) - Get Report and as analysts at Jefferies cut their price target on the company.
In economic news, the Labor Department said the producer price index, which measures inflation before it reaches consumers, fell 0.3% last month, the first drop since June and the biggest since January. Core wholesale prices, which exclude volatile food and energy prices, tumbled 0.3%.
"The market is predicting another cut at 80% and given PPI's dramatic drop this morning, we could see the rate cut engines start to rev up," said Mike Loewengart, vice president of strategy at E*Trade. "While the Fed has made it very clear it's not interested in a prolonged rate cut campaign, the writing is essentially on the wall. Looking at the Fed's most important indicators-jobs remain strong but are showing pockets of weakness and CPI has been decidedly below the Fed's 2% target over the past four months."