The benchmark S&P 500 and the tech-heavy Nasdaq have declined in choppy trading, with investors exercising caution as they awaited economic data and clarity on the administration of US President Donald Trump’s fresh tariffs that are expected to take effect next week.
US equities experienced a brief reprieve over the last two sessions, following Trump’s indication that not all tariffs would be enforced by the April 2 deadline, with certain countries potentially being granted exemptions – although specifics remain elusive.
This offered a semblance of stability to Wall Street, with the trio of major indexes touching two week highs earlier in the week.
The S&P has ascended more than 4.0 per cent since its mid-March lows while the Nasdaq has advanced roughly 6.0 per cent.
Nevertheless, ambiguity surrounding the magnitude of US tariffs, the likelihood of retaliatory measures from trading partners and the potential repercussions on the global economy and businesses have kept investors vigilant.
Adding to the unease, Barclays revised its S&P 500 target downward to 5,900 points from 6,600 due to uncertainty surrounding Trump’s tariffs.
“The market is now on hold. (Trump’s softened tariff stance) seems to have made a temporary relief,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
Investors “are going to be sensitive to tariffs … the White House keeps changing its position, creating uncertainty”.
In early trading on Wednesday, the Dow Jones Industrial Average rose 141.30 points, or 0.33 per cent, to 42,728.80, the S&P 500 lost 19.38 points, or 0.34 per cent, to 5,757.73 and the Nasdaq Composite lost 179.23 points, or 0.98 per cent, to 18,092.63.
The S&P 500 was weighed down by heavy-weight growth stocks.
Tesla fell 3.2 per cent, Nvidia dropped 3.5 per cent and Alphabet declined 1.5 per cent.
On the other hand, an index that assigns an equal weight to all companies on the benchmark index edged up 0.3 per cent.
Seven of the 11 S&P 500 sectors advanced, led by energy’s 1.3 per cent rise.
Crude prices climbed as investors priced in tighter global supply following the US threat of tariffs on countries buying Venezuelan oil.
The main focus of this week will be the personal consumption expenditures price index – the Federal Reserve’s favoured inflation gauge – due on Friday.
Concerns about inflation have pushed consumer confidence to its lowest in over four years while analysts have said that a prolonged slump in deal-making activity is likely to spark a wave of job cuts on Wall Street.
Chicago Fed president Austan Goolsbee said that it may take longer than anticipated for the next cut because of economic uncertainty, according to a report.
Speeches from policy makers including Neel Kashkari and Alberto Musalem are anticipated later in the day.
Both the S&P 500 and the Nasdaq tumbled 10 per cent from their respective record highs earlier this month – a phenomenon known as a correction.
Dollar Tree rose 3.8 per cent after the discount-retail chain said it is nearing a sale of its Family Dollar business to a consortium of private equity investors for about $US1 billion ($A1.6 billion).
Excluding the Family Dollar banner, the company reported quarterly net sales marginally higher than the previous year’s figure.
GameStop jumped 9.8 per cent following its board’s unanimous approval to incorporate bitcoin as a treasury reserve asset.
Advancing issues outnumbered decliners by a 1.04-to-1 ratio on the NYSE and declining issues outnumbered advancers by a 1.42-to-1 ratio on the Nasdaq.
The S&P 500 posted 13 new 52-week highs and two new lows while the Nasdaq Composite recorded 20 new highs and 70 new lows.
https://thewest.com.au/business/markets/wall-street-mixed-as-investors-assess-tariff-outlook-c-18171343
