US stocks came off their highs Wednesday, led by technology stocks, as worries about escalating tensions between the China and the US edged out optimism over businesses reopening as the coronavirus pandemic recedes and economic aid packages by governments.
The Dow Jones Industrial Average US:DJIA advanced 74 points, or 0.3%, to 25,069. The S&P 500 US:SPX fell 15 points, or 0.5%, to 2,977. The Nasdaq Composite US:COMP retreated 165 points, or 1.7%, to 9,175.
On Tuesday the Dow jumped 529.95 points or 2.2%, to finish at 24,995.11, while the S&P advanced 36.32 points, or 1.2%, to end at 2,991.77, after briefly breaching the 3,000 level for the first time since March 5. The Nasdaq Composite finished at 9,340.22, up 15.63 points, or 0.2%.
Worries around rising US-China tensions and the threat of a second wave of COVID-19 infections threatened the optimistic tone in risk assets.
Protests in Hong Kong and deteriorating US-China relations could be a catalyst for a “risk-off” move in markets, requiring traders to remain nimble.
President Donald Trump has said he would make an announcement by the end of the week regarding China’s efforts to impose new security laws that would undercut Hong Kong’s autonomy. And China’s Foreign Ministry said on Wednesday it would strike back at the US if it took any action over the security laws. ♦
