Market participants in US stock markets appeared unimpressed following Donald Trump’s trip to China. Major stock indices saw significant declines on Friday amidst continued uncertainty.
Specifically, the Dow dropped by 1.1%, falling to 49,526 points. The Nasdaq-100 fell by 1.5% to 29,125 points, and the broader S&P 500 decreased by 1.2% to 7,409 points.
Although Trump was reportedly received very warmly in Beijing, key disputes remain unresolved. Notably, the issue of mutual tariffs was allegedly not addressed during his visit. Instead, the long-standing issue of Taiwan resurfaced-China reinforced its claim over the breakaway island, while Trump questioned the planned sale of military assets. A war over Taiwan, however, is the last thing the semiconductor-dependent markets require.
For those doubtful about whether U.S. President Donald Trump has moved closer to opening the Strait of Hormuz following his visit, the oil price told a different story. Brent crude oil prices rallied sharply on Friday. By 10:00 PM German time, a barrel of North Sea Brent cost $109.50, representing a 3.6% increase from the previous trading day’s close.
Given the already rising inflation levels, bond fears are once again haunting the stock markets. Investor concern persists that the US central bank will eventually be forced to respond to sustained inflation by raising interest rates, a development widely viewed on the stock market as detrimental.
Conversely, the price of gold was sharply declining. By the evening, a fine ounce traded at $4,542 (a 2.3% decrease), equating to a price of €125.62 per gram.
The European common currency also showed weakness late Friday. The Euro cost $1.1624, meaning the dollar was available for €0.8603.