The market finished lower on Friday as shares of big tech lagged, with stocks also taking a hit after China retaliated to the closure of its consulate in Houston earlier this week by ordering the U.S. to close its consulate in Chengdu.
The Dow Jones Industrial Average was down 0.7%, nearly 200 points, on Friday, while the S&P 500 fell 0.6% and the tech-heavy Nasdaq Composite 0.9%.
The market took a hit from worsening U.S.-China tensions, which hit a low point after Beijing ordered the closure of a U.S. consulate in Chengdu on Friday.
China’s Foreign Ministry claimed that the order was a “legitimate and necessary” response to the Trump Administration’s decision to shut down the Chinese consulate in Houston earlier this week.
Big tech stocks, meanwhile, continued to decline and dragged the market lower for a second day in a row: Facebook, Apple and Microsoft all fell.
Shares of Intel tanked over 16% after the company, despite beating earnings and revenue estimates last quarter, indicated that it expects further delays in its next-generation chips.
“While traders couldn’t get enough of big tech last week, they cant get away from it fast enough this week,” Bespoke Investment Group said in a recent note.
Spot gold traded higher than $1,900 for the first time since 2011. Investors have rushed to safe-haven assets like gold amid continued uncertainty around the coronavirus pandemic and U.S.-China tensions.
WHAT TO WATCH FOR
Republicans in Congress are expected to unveil a new coronavirus relief plan early next week. With the extra $600 a week in federal unemployment benefits set to expire by the end of July, lawmakers in Washington are scrambling to agree on the next round of coronavirus aid. The next round of stimulus is likely include a second round of stimulus checks, more money for PPP small business loans and funding for schools in the fall.