- US stocks edged higher on Wednesday as traders weighted the prospects of a new spending bill against inflamed tensions with China.
- Concerns of a fresh US-China conflict intensified after the US ordered the closure of China’s consulate in Houston. China fired back soon after, vowing to implement “firm countermeasures.”
- Earnings disappointments from United Airlines and Snap weighed on the market.
- Oil fell from four-month highs, with West Texas Intermediate crude futures dropping as much as 2%, to $US41.14 per barrel.
- Watch major indexes update live here.
US stocks edged higher on Wednesday as traders weighted the prospects of a new spending bill against inflamed tensions with China.
Fears of a worsening US-China relationship escalated after the US unexpectedly ordered the closure of China’s consulate in Houston. The State Department said the decision was “to protect American intellectual property and Americans’ private information.”
China quickly retaliated, saying it plans to exact “firm countermeasures” against the US. The tit-for-tat actions revive strains between the economic superpowers after a period of relative stability.
Amid the rising tensions, investors are pinning hopes that a new spending bill will be enacted before an upcoming deadline, with the existing $US600 unemployment-insurance boost set to expire.
Here’s where US indexes stood shortly after the 9:30 a.m. ET market open on Wednesday:
- S&P 500:3,262.92, up 0.2%
- Dow Jones industrial average: 26,886.13, up 0.2% (46 points)
- Nasdaq composite:10,697.41, up 0.2%
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A couple of earnings misses also weighed on investor sentiments.Snap shares plunged in early trading after the company missed second-quarter estimates for daily active users.
United Airlines slightly declined alongside the broader market after posting a quarterly loss of $US1.62 billion and an 87% year-over-year drop in revenue.
Much-anticipated reports from Microsoft and Tesla are due after Wednesday’s close. The latter company’s report carries more weight than usual, as Tesla stands a chance of entering the S&P 500 if it posts another quarterly profit.
Some companies soared above the pack. Pfizer shares tore higher after announcing the US government placed a $US1.95 billion order for 100 million doses of its coronavirus vaccine. The government stands to buy another 500 million additional doses under the agreement.
Oil fell from its highest level since March. West Texas Intermediate crude dipped as much as 2%, to $US41.14 per barrel. Brent crude, the international benchmark, fell 1.6%, to $US43.62 per barrel, at intraday lows.
Major indexes posted meager gains on Tuesday, trading lower into the afternoon after Senate Majority Leader Mitch McConnell indicated that a second round of fiscal stimulus would likely not be passed until August. Such a delay all but guarantees the $US600 per week expansion to unemployment benefits will expire and leave tens of millions of jobless Americans without a key lifeline.
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