Wall Street closed mixed on Tuesday after a highly choppy session. Extreme volatility was witnessed during yesterday’s trading as U.S.-China trade and tariff conflicts re-escalated. The sentiment of bears was so strong that bulls failed to maintain Monday’s rally despite an impressive beginning to the third-quarter earnings season. The Dow ended in positive territory while both the S&P 500 and Nasdaq Composite finished in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 0.4% or 202.88 points to close at 46,270.46. Notably, 20 components of the 30-stock index ended in positive territory, while 10 finished in negative territory. At intraday low, the blue-chip index was down 615.55 points and at intraday high, the index was up 455.09 points.
The tech-heavy Nasdaq Composite finished at 22,521.70, sliding 0.8% or 172.91 points driven by the weak performance of technology bigwigs. At the intraday low, the tech-laden index was down by 2.1%.
The S&P 500 fell 0.2% to finish at 6,644.31. Out of the 11 broad sectors of the broad-market index, nine ended in positive territory, while two were in negative territory. At the intraday low, the benchmark was down by 1.5% and at intraday high, the index was up by 0.4%. However, out of the 11 broad sectors of the broad-market index, nine ended in positive territory, while two were in negative territory.
The Real Estate Select Sector SPDR (XLRE), the Financials Select Sector SPDR (XLF), the Consumer Staples Select Sector SPDR (XLP), the Industrials Select Sector SPDR (XLI) and the Materials Select Sector SPDR (XLB) rose 1%, 1.1%, 1.6%, 1.2% and 1%, respectively. On the other hand, the Technology Select Sector SPDR (XLK) was down 1.3%.
The fear gauge, the CBOE Volatility Index (VIX) was up 9.4% to 20.81. At the intraday high, the index touched 22.94. A total of 20.1 billion shares were traded on Tuesday, lower than the last 20-session average of 20.2 billion. The S&P 500 recorded 23 new 52-week highs and 10 new 52-week lows. The Nasdaq Composite registered 123 new 52-week highs and 93 new 52-week lows.
U.S.-China Trade War Re-Escalates
On Oct. 14, China sanctioned five U.S. subsidiaries of South Korean shipbuilder Hanwha Ocean. With this any Chinese organization or individual will be prohibited from doing business with these companies. China cited national security as the primary reason for these sanctions.
On the other hand, President Donald Trump said his administration is mulling over imposing cooking oil embargo on China. In a Truth Social post, Trump wrote, “China is committing an Economically Hostile Act by “purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers.” The U.S. government is considering “terminating business with China having to do with Cooking Oil.”
Trade tensions between the two largest trading partners in the world worsened last week after China imposed stringent restrictions on exporting rare earth minerals. President Trump threatened to impose an additional 100% duty on Chinese goods over and above the current level of tariffs.
Strong Start to Third-Quarter Earnings Season
JPMorgan Chase & Co. JPM came up with quarterly adjusted earnings of $5.07 per share, beating the Zacks Consensus Estimate of $4.83 per share. This compares to earnings of $4.37 per share a year ago. The company posted quarterly revenues of $46.43 billion, surpassing the Zacks Consensus Estimate by 3.51%. This compares to year-ago revenues of $42.65 billion.
The Goldman Sachs Group Inc. GS reported quarterly adjusted earnings of $12.25 per share, beating the Zacks Consensus Estimate of $11.11 per share. This compares to earnings of $8.4 per share a year ago. The company posted quarterly revenues of $15.18 billion, outpacing the Zacks Consensus Estimate by 7.37%. This compares to year-ago revenues of $12.7 billion.
Despite strong results, the stock prices of JPMorgan and Goldman Sachs fell 1.9% and 2%, respectively. JPMorgan currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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