U.S. stocks dipped in early trading on Wednesday, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite opening lower amid renewed jitters over trade tensions between China and the United States.
With stocks paring some gains early in the day, Wall Street’s pensive mood continued into market open with U.S.-China flare up over chips at the center stage.
The Dow Jones Industrial Average opened 300 points lower, down 0.7%, while the S&P 500 slipped 0.53%. The Nasdaq also traded in the red, opening 0.57% lower.
Declines for the Dow, Nasdaq and S&P 500, which snapped its six-day winning streak, comes as investors react to latest developments in the U.S.-China trade relations.
Notably, stocks rallied when the two giants of the global economy signalled agreement with a trade truce.
However, concerns around the U.S. deficit, with Moody’s downgrade in view, has combined with overall jitters on the macroeconomic front to fade bullish momentum. President Donald Trump’s tax bill and now the fresh chips-related disagreements add to these concerns, with shares of chip maker Nvidia down 0.6%.
With tariff focus again on the table, U.S. Treasury yields rose. The 30-year Treasury yield returned to above the psychological level of 5%, while the 10-year yield jumped to above 4.5%.
Although risk and uncertainty remains elevated, Derek Chollet, head of JPMorgan’s Geopolitics Center, told CNBC there’s still an opportunity for investors amid all the downside action.
Sentiment across risk asset markets also saw Bitcoin (BTC) shed some of its gains after breaking above $108,000 during the European trading session. Gold was up 0.7% to $3,307.