U.S. technology companies jump
Investors trying to gauge tensions between U.S., others.
A rally for technology companies helped U.S. stocks recover some of their recent losses Thursday, but trading remained uneven as investors tried to figure out if the tensions between the U.S. and other nations will spill over into a trade war.
Technology companies and banks were responsible for the bulk of the gains. U.S. crude oil rose to its highest price since November 2014.
Stocks started the day at their lowest levels in almost a month. Contradictory reports from U.S. officials about trade policy have led the market to lurch between gains and losses, sometimes by the hour.
“What’s happening is that the market is watching the president and his team and the president is watching the markets,” said Marina Severinovsky, an investment strategist at Schroders.
Severinovsky said the Trump administration doesn’t want to derail the economy or the stock market and is sensitive to the way investors react to the ongoing trade disputes. Lately they’ve sent stocks lower, but if the market rallies in response to some strong second-quarter reports next month, she said the Trump team might feel encouraged to take tougher positions in trade talks.
Walgreens fell 9.9 percent to $59.70, and medication distributor Cardinal Health shed 4.8 percent to $50.37. Pharmacy benefits manager Express Scripts dipped 1.4 percent to $77.62.
Benchmark U.S. crude continued to surge and gained 0.9 percent to $73.45 a barrel in New York. It’s at its highest price since November 2014. Brent crude, used to price international oils, rose 0.3 percent to $77.85 a barrel in London.
Oil prices have rallied over the last week. First, investors concluded that OPEC countries will not increase oil production by as much as they feared. Then the U.S. started pressuring countries to stop importing oil from Iran, the world’s sixth-largest producer of oil. The Trump administration is threatening other countries, including close allies such as South Korea, with sanctions if they don’t cut off Iranian imports by early November, essentially erecting a global blockade.
Trade concerns are a major reason the market is having a downbeat finish to the second quarter. The S&P 500 is down 2.4 percent in the last two weeks, trimming its gain for the quarter to 3 percent. The Dow is up just 0.5 percent.
The volatility may worsen at the beginning of the third quarter, as the U.S. is set to impose a 25 percent tariff on billions of dollars of Chinese products starting July 6. In response, China will raise import duties on $34 billion worth of American goods.