Wall Street Closes Lower on Fears of a Reignited U.S.–China Trade War
Investor sentiment turned cautious following a report suggesting that the Trump administration is considering banning Chinese software.
Quick overview
- U.S. stocks declined on Wednesday due to renewed trade tensions with China and a significant drop in Netflix shares.
- The Dow Jones Industrial Average fell 0.71%, while the S&P 500 and Nasdaq Composite dropped 0.52% and 0.93%, respectively.
- Investor sentiment was affected by reports of potential U.S. export bans on Chinese products and a postponed summit between Trump and Putin.
- Netflix shares plummeted 10% despite increased revenue and subscriber growth, following a miss on operating margin expectations.
U.S. stocks fell on Wednesday as renewed concerns over the U.S.–China trade conflict and a sharp drop in Netflix shares weighed on major indexes.
The Dow Jones Industrial Average lost 0.71% to close at 46,590.41, while the S&P 500 fell 0.52% to 6,700.48 and the Nasdaq Composite declined 0.93% to 22,740.40.
Trade Tensions and Geopolitical Risks
Investor sentiment turned cautious following a Reuters report suggesting that the Trump administration is considering banning Chinese exports developed with U.S. software. The news raised doubts about whether the long-awaited meeting between President Donald Trump and China’s Xi Jinping, expected to take place in South Korea later this month, will go ahead as planned.
Meanwhile, a potential summit between Trump and Russian President Vladimir Putin was postponed after reports indicated that Russian officials had no intention of ending the ongoing war in Ukraine.
Markets are also awaiting Friday’s U.S. consumer price index (CPI) data, which could solidify expectations for a Federal Reserve interest rate cut at its October meeting. However, the partial U.S. government shutdown, now in its fourth week, is disrupting the flow of economic data and clouding inflation signals.
Netflix Leads Declines
Netflix shares plunged 10% after the streaming giant missed Wall Street’s third-quarter operating margin expectations, reporting a 28% margin due largely to charges linked to a tax dispute with Brazilian authorities.
Despite the miss, the company’s revenue and net income increased, supported by its strongest quarter ever for advertising sales, higher subscription prices, and continued subscriber growth.
Elsewhere, Mattel fell 2.7% after missing estimates and reporting weaker North American sales, while AT&T slipped 1.9% despite adding more wireless subscribers than expected in the third quarter. The telecom company benefited from aggressive promotions tied to the latest iPhone launch, helping it attract customers in an increasingly competitive market.
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