US market extends losses on rising US-China tensions

The US stock market ended the session significantly lower on Tuesday, August 2, 2022, as risk-off sentiment intensified amid rising tensions between the two economic superpowers ahead of the planned visit from the Speaker of the US House of Representatives, Nancy Pelosi, to Taiwan. Meanwhile, signs of slowing global growth and aggressive comments from a couple of Federal Reserve officials also weighed on sentiment.

At the close of trading, the Dow Jones Industrial Average fell 402.23 points, or 1.23%, to 32,396.17. The S&P500 index fell 27.44 points, or 0.67%, to 4,091.19. The big tech Nasdaq Composite Index fell 20.22 points, or 0.16%, to 12,348.76.

All 11 sectors of the S&P500 closed lower, with real estate issuance suffering the largest percentage loss, falling 1.3%, followed by financials (down 1.07%), industrials (down 1.05% less), materials (1% less) and information technology (0.7% less). ) problems.

Stocks were in negative territory throughout the day as investors sought safer assets out of caution ahead of Pelosi’s possible arrival in Taiwan during her Asia trip.

Pelosi is expected to land in Taiwan later this morning, and the expected arrival of the number three US official has angered China considerably in recent days.

China, which regards Taiwan as a rogue province awaiting reunification with the mainland, by force if necessary, has warned that Pelosi’s visit would escalate bilateral tensions. China has been seeking “reunification” with Taiwan for decades.

The United States said on Monday it would not be intimidated by Chinese “saber rattling” over the visit. The White House has warned China not to turn its visit into a crisis.

Taiwan is a key maker of the semiconductor chips that power everything from phones to cars, and its unsustainable relationship with China is one reason Congress passed the CHIPS Act last month, a $280 billion package that encourages the implementation of semiconductor manufacturing in the United States.

The Taiwan issue added to a sense of unease sparked by China, Europe and the United States on Monday, which reported weakening factory activity, with activity in the United States slowing to its lowest level since August 2020.

Caterpillar shares closed down nearly 6% after reporting lower-than-expected earnings for the June quarter. The company reported a net profit of $1.67 billion for the second quarter ending June 2022, compared to $1.41 billion a year ago. Revenue for the quarter rose 10.6% to $14.25 billion from $12.89 billion a year ago.

Dupont shares fell 2.7%, weighed down by a downward revision to the company’s full-year outlook.

Shares of Uber Technologies soared nearly 19% after the company said gross bookings hit an all-time high of $29.1 billion in the second quarter ending June 2022, up 33% from the corresponding quarter. from last year. Uber also expects gross bookings of $29 billion to $30 billion for the third quarter of this fiscal year.

Shares of Pinterest rose 12.25%, boosted by reports that Elliott Investment Management became the company’s largest shareholder.

Among Indian ADRs, Tata Motors fell 0.72% to $30.36, INFOSYS fell 0.66% to $19.49, HDFC Bank fell 1.6% to $62.08, Dr Reddy’s Labs lost 0, 2% to $51.38, ICICI Bank decreased 0.24% to $20.68 and WNS Holdings fell 0.81%. at $85.86. Wipro added 0.19% to $5.37 and Azure Power Global added 1.7% to $12.

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(This story has not been edited by Business Standard staff and is automatically generated from a syndicated feed.)

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