Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average finished down nearly 300 points Thursday after President Trump said the U.S. would impose an additional 10% tariff on $300 billion in Chinese goods.
  • Verizon Communications (VZ - Get Report)  slipped after the telecom giant posted better-than-expected second-quarter earnings and increased its full-year profit guidance.
  • General Motors (GM - Get Report)  eased after the automaker posted better-than-expected second-quarter earnings as strong North American truck sales helped offset an ongoing slump in China's deteriorating car market.

Wall Street Overview

Stocks finished lower Thursday after President Trump said the U.S. would impose an additional 10% tariff on $300 billion in Chinese goods starting Sept. 1.

The Dow Jones Industrial Average, which had been up 300 points at one point, finished down 220 points, or 1.05%, to 26,583, the S&P 500 fell 0.9% and the Nasdaq dropped 0.79%.

Trump later said he might raise tariffs on Chinese goods beyond 25% if trade negotiations with Beijing remain stalled. He added that he's "not concerned at all" that stock markets fell after his announcement of the new tariffs.

"I expected that a little bit," he said.

 Goldman Sachs (GS - Get Report) , Caterpillar (CAT - Get Report)  and Nike (NKE - Get Report) were leading the Dow's retreat in recent trading.

...during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%...

— Donald J. Trump (@realDonaldTrump) August 1, 2019

Mike Loewengart, vice president of investment strategy at E*Trade, said that "if recent history has shown us anything, it's that the Fed and tariffs are the dominant factors moving the market."

"The market is likely doubling down on some of this negative news," Loewengart said. "And while investors seek clarity on the trade front, it's important to keep in mind that this too will likely pass, and keep your eye on broader market performance and economic fundamentals. After all, the market hit all-time highs just last week."

The U.S. and China resumed trade negotiations this week, with U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu meeting in Shanghai for two-day trade talks.

The meeting was described as "constructive" and negotiations are scheduled to continue in Washington next month. The White House issued a statement Wednesday saying the Chinese "confirmed their commitment to increase purchases of United States agricultural exports."

The two countries have been locked in a trade war for over a year, with each nation slapping tariffs on the other's products. In May, Trump raised tariffs to 25% from 10% on $250 billion in Chinese goods and last month the president threatened to impose tariffs on another $325 billion of Chinese goods.

"The trade war with China is alive and well and markets are constantly at risk of being knocked down by negative developments," Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, said. "Today's tweets by President Trump concerning potential additional tariffs being imposed on China next month are a great example of that."

Zaccarelli said the market should continue to expect saber rattling between the U.S. and China from now until the election, adding that "it's just one more 'headline' risk to worry about."

"At the end of the day, the economy is strong, the consumer is spending and the Fed is now loosening monetary policy," he said, "so the markets should remain relatively resilient. If it weren't for the trade war, business sentiment would likely be much higher and the S&P would be as well."

Apple (AAPL - Get Report) shares fell sharply immediately after Trump tweeted. The company gets a significant portion of its overall revenue from China and assembles most of its iPhones and many other products there. The shares were down 2.2% to $208.43.

Oil prices plummeted on the news as well. Brent crude contracts for September delivery, the global benchmark, were down $3.96 at $61.09 per barrel, while West Texas Intermediate contracts for the same month, which are more tightly linked to U.S. gas prices, were down $4.14 to $54.44 per barrel.

The 10-year Treasury note yield tumbled to its lowest level since 2016 and was recently down 6.3% to 1.8940.

Stocks had risen earlier in the session after weak U.S. manufacturing data raised hopes the Federal Reserve would cut interest rates for a second time this year.

The U.S. central bank on Wednesday dropped the target range for its overnight lending rate to 2% to 2.25%, disappointing investors and causing the Dow to suffer its biggest one-day decline since May 31.
 
"We're thinking of it essentially as a mid-cycle adjustment to policy," Fed Chairman Jerome Powell said. "I'm contrasting it with the beginning of a lengthy cutting cycle."

Trump voiced his displeasure with the Fed's actions, tweeting that "what the market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, the European Union and other countries around the world. As usual, Powell let us down."

The Institute for Supply Management said Thursday that its manufacturing index slipped to 51.2 in July from 51.7 in June. Any reading above 50 signals an expansion. But while this was the 35th straight month of growth, it marked the fourth month in a row where the pace of growth slowed.

Meanwhile, the Senate passed a bill to raise the U.S. budget and lift the debt ceiling for the next two years. The bill now goes on to the White House for Trump's signature.

Verizon Communications (VZ - Get Report) shares dipped to $55.25 after the telecom giant posted better-than-expected second quarter earnings and increased its full-year profit guidance.

Shares of General Motors (GM - Get Report)  dropped slightly to $40.13 after the automaker posted better-than-expected second quarter earnings. Strong North American truck sales helped offset an ongoing slump in China's deteriorating car market.

Beyond Meat (BYND) shares tumbled 10% to $176.04 after the plant-based food producer priced its new stock offering at a steep discount to last night's close. Beyond Meat is Real Money's Stock of the Day.

Shares of DuPont (DD - Get Report)  fell to $71.73 after the company posted stronger-than-expected second-quarter earnings Thursday and boosted its full-year profit guidance.

Qualcomm  ( QCOM - Get Report) shares fell 2.7% to $71.20 after the chipmaker posted weaker-than-expected third quarter sales and cautioned that it might not see a benefit from 5G network rollouts until next year.
 
Facebook's ( FB - Get Report) acquisitions are a central focus of a federal antitrust probe targeting the firm. The FTC is looking into whether Facebook acquired smaller technology firms with the intent of stamping out competition, the WSJ reported on Thursday. The shares were down nearly 1% to $192.73.
 
Home-improvement retailer Lowe's ( LOW - Get Report) is eliminating thousands of jobs and then outsourcing them as a cost-cutting measure, employees told the Wall Street Journal. The shares were off 1.9% to $99.47.
 
Apple, Caterpillar, DuPont, Facebook, Goldman Sachs, and Microsoft are holdings in Jim Cramer's Action Alerts PLUS member club . Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.
 
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