The S&P 500 equity index closed out the trading day on Friday in negative territory, ended as bank and chipmaker stocks weighed on the index in conjunction with seemingly non-stop volatility surrounding the on-going trade talks between the U.S. and China.
All three major domestic equity indexes posted a weekly loss as the markets reacted to reports from the U.S.-China trade summit, rising Treasury yields and the increasing price of crude oil.
China denied accounts that it had offered a package to reduce the U.S. trade deficit by up to $200 billion, but said the consultations were “constructive,” in the latest salvo of tit-for-tat messages to emerge from the high-level meeting.
Boeing rose on hopes for a reduction in the U.S.-China trade deficit, after an American source said the company would be major beneficiary of a narrowed trade gap. Boeing sells about a fourth of its commercial aircraft to Chinese customers. The plane maker’s shares advanced 2.1 percent, helping keep the Dow Jones Industrial Average out of negative territory.
Relatively tariff-immune small-cap stocks continued to outperform, with the Russell 2000 hitting its third straight record closing high.
Yields of 10-year Treasuries pulled back from near seven-year highs as buyers emerged after a bond sell-off earlier in the week prompted by growing inflation worries. Although banks typically benefit from higher interest rates, shares of JPMorgan Chase, Citigroup, Bank of America and Wells Fargo were all lower, causing the S&P Financial index to end the trading day down 0.9 percent.
Alphabet slid 1.1 percent ahead of an expected story about the tech bellwether on CBS News’ “60 Minutes” program this weekend. Shares of Applied Materials fell 8.2 percent after the chip equipment maker’s weak 2019 forecast added to concerns of softening smartphone demand.
The Philadelphia Semiconductor index ended the session down 1.4 percent, its worst loss since April 19.
Deere helped raise the industrials sector, rising 5.7 percent after the company posted a higher full-year earnings estimate.
Campbell Soup fell 12.4 percent after its chief executive officer abruptly stepped down and the company reduced its full-year earnings forecast, saying it expects higher costs to weigh on margins.
The S&P Energy index fell 0.8 percent on lower crude oil prices. Despite the session’s decline, crude oil still posted its sixth consecutive weekly advance.
Approximately 6.18 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.64 billion-share average over the past 20 trading days.