Dow Under Pressure as G-7 Leaders Feud Over Trade
U.S. stocks were trading modestly lower early Friday as tensions between the U.S. and major allies flared up ahead of the G-7 meeting in Canada. The main benchmarks were still on track for weekly gains, however.
What are markets doing?
The Dow Jones Industrial Average DJIA slipped 54 points, or 0.2%, to 25,187. The S&P 500 SPX fell 6 points, or 0.2%, to 2,764. Meanwhile, the Nasdaq Composite Index COMP declined 34 points, or 0.4%, to 7,602.
The Dow was heading for a 2% weekly advance, while the S&P was up 1% and the Nasdaq was 0.3% higher.
What is driving the market?
The downbeat mood on Friday comes as leaders of the Group of Seven advanced economies gathered in Quebec for a two-day summit where trade issues will be in focus.
Hostilities between Trump and leaders of two close allies—Canada and France—have intensified ahead of the meeting after a dispute erupted, mainly on Twitter.
The U.S. president is now planning to leave the G-7 summit early, to go to Singapore ahead of his scheduled meeting there with North Korea leader Kim Jong Un on Tuesday.
Away from international relations, investors are starting to focus on central bank meetings next week. The Federal Reserve is expected to raise interest rates while the European Central Bank governors are expected to announce when they will stop purchases assets under their quantitative easing program.
What are strategists saying?
“There is still a cloud over the markets because of trade issues and we see little upside in the near term,” said Lindsey Bell, investment strategist at CFRA Research.
“But the market is also accepting that there will be no major revelations from the G-7 or the North Korea Summit,” Bell added.
Broadcom Inc. AVGO dropped 3.5% after reporting earnings late Thursday.
DocuSign Inc. DOCU rallied 9% after the tech company’s earnings out late Thursday beat forecasts.
U.S.-listed shares of Deutsche Bank AG DBK, DB fell 3.3% ahead of the bell. Bloomberg reported that the German lender is exploring options to merge with rival Commerzbank AG CBK.
What’s on the economic calendar?
In a relatively quiet day for economic data, the major release is a reading on wholesale inventories for April, due at 10 a.m. Eastern Time.
There are no Fed speakers, as the central bank is in a blackout period before the Federal Open Market Committee meeting next week.
Article was originally published by Sara Sjolin at marketwatch.com