Risk-Off Move in Markets Moderates—Here’s What You Need to Know

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Stocks fell Friday, but the losses moderated by midday. U.S.-China trade tensions weighed on market sentiment. 

Major U.S. indices were down marginally by midday, with the S&P 500 down 0.3% at noon and the tech-heavy Nasdaq down just 0.15% at noon. The 10-Year Treasury yield rose to as high as 0.65%. 

Tens of billions of dollars of new treasury bond issuances—to fund the fiscal stimulus plans—are weighing on treasury prices. Still, the risk-off move was pronounced in the morning and less so in the afternoon. 

In the morning, the S&P 500 fell as much as 1.1%, with the 10-Year Treasury yield falling to 0.6% even through the selling of new bonds. 

On Thursday, the S&P 500 started the day down more than 1% before finishing the day with a gain. 

Still, the past two weeks and a half have the S&P 500 down 3.5%, as full valuations against risks of a second virus infection wave cause fear. 

Driving the largely negative sentiment Friday was U.S.-China tensions. The U.S., hesitant to progress on trade with China, sent military ships towards the country, according to CNN. Much of the poor relations have been recently sparked by what the U.S. sees as bad handling of the coronavirus outbreak in China. 

U.S. retail sales also fell 16% in April against economists' estimates of a 12% drop. This comes after many consumer-facing companies said on earnings that they were seeing positive sales trends in April, meaning a less severe decline in spending than in March. 

Nike  (NKE) - Get Report said it is reopening stores in the China area, and the stock rose 0.2%. 

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