Markets Sour Thursday as U.S.-China Tensions Linger, Big Tech Regulation Looms

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Stocks fell solidly into the red by midday Thursday, as U.S.-China tensions continue and U.S. big tech falls under more regulatory scrutiny. 

All three major U.S. indices, after having been flat in the morning, fell more harshly by midday. The S&P 500 fell about 0.5% and the 10 year treasury yield slipped to 0.67%. Yields fall when prices rise.

Most cyclical sectors were down, but big tech was pulling down the S&P 500, as the group is about 20% of the index’s market cap. The NYSE FANG index fell 0.6%, while Microsoft  (MSFT) - Get Report also fell more than 1%. 

This comes as the Department of Justice threatened to file suit against Alphabet  (GOOGL) - Get Report for what the department sees as anti-trust violations in Google’s search and advertising business. Apple  (AAPL) - Get Report may also be under the microscope for its powerful app store business. “The anti-trust storm clouds appear to be building in the beltway against big tech looking ahead into the rest of 2020,” wrote Wedbush Securities analyst Dan Ives. 

Apple shares fell 0.6%. 

Not helping Apple was a worsening relationship between the U.S. and China. 

The senate has passed a bill that would delist Chinese companies from American exchanges, as some Chinese companies have not been transparent with accounting and audit records. Public companies in the U.S. must follow rules in accordance with the Public Company Accounting Oversight Board. 

This is a negative indicator for trade relations between the two largest economies in the world. More tariffs on China could hurt Apple, as it usually has in the past. 

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