The top three U.S. stock market indices experienced a turbulent week after anxiety over the lack of trade talk progress between the U.S. and China rocked Wall Street. Investors are concerned that the U.S. and China won't be able to strike a trade deal before the end of the year.
The Dow Jones Industrial Average (NYSE: DIA) ended the turbulent week 0.5% down; The S&P 500 (NYSE: SPY) fared little better, finishing 0.3% down, sharing a similar fate to NASDAQ (NYSE: QQQ), which also ended the week with a 0.3% drop. The losses ended weeks-long advances for each of the indexes, with the Dow losing four weeks of continual gains, while the S&P and NASDAQ lost six and seven weeks of gains, respectively.
The Dow and S&P ultimately suffered the worst during a week of anxious trading, suffering a three-day losing streak that contributed to their respective losses. At least half of the Dow's 30 members ended the streak with solid gains, regardless, the other half suffered losses significant enough to bring the entire index down considerable. The pain felt by American indices were shared by European indices as well, as European markets closed with a similar tune of weekly losses.
The cause for the poor performance was, of course, anxiety over the ongoing Sino-American trade dispute. The trade war kicked off in 2018, with the first tariffs being enacted on January 22, 2018, on solar panels and washing machines. Since then, stock performance has been affected by the tit-for-tat dispute that has left many American companies feeling the pinch. The performance of the three top U.S. indices over the past week has been indicative of an ongoing trend, where every action taken by the U.S. or China causes abrupt gains and losses in the domestic market.
The recent anxiety in Wall Street stems from a growing concern that the trade war will continue into the next year. There are hopes that the two largest global economies can reach an agreement before new tariffs are set to take effect on Dec. 15. Even though the three major indices ended the week down, the fact that recoveries were made after trading on Friday is indicative of Wall Street's hopes that a resolution will be reached.
Typically, Wall Street has been relatively optimistic despite the economic backlash from the ongoing trade war. With every bit of supposedly good news from President Donald Trump, even if details are scant, there is a considerable gain for the US Indices. Friday's gains were one such surge, even if it wasn't enough to offset weekly losses caused by anxious trading. To recover from a week of poor performance, good news from the White House will need to be in constant supply to assure investors that the Trade War isn't going to intensify, or that the Dec. 15 deadline will arrive with no end to the ongoing dispute.