Thanks to Donald Trump’s renewal of his trade war with China Wall Street had its worst week since last December.
The benchmark measures the S&P 500 and Nasdaq saw their worst weekly percentage plunges since December.
The Fed’s long-expected rate cut had no impact except to spark market demands for a repeat cut in September.
The Dow and the S&P 500 hit their lowest levels since late June with S&P 500 and Nasdaq registering their fifth consecutive days of losses. US 10-year Treasury yields saw their steepest weekly decline in over seven years.
The Dow fell 98.41 points, or 0.37%, to 26,485.01, the S&P 500 lost 21.51 points, or 0.73%, to 2,932.05 and the Nasdaq lost 107.05 points, or 1.32%, to 8,004.07.
The Dow lost 2.6% for the week, the biggest weekly loss since May 31 and is off 3.20% from its record close 27,359 on July 15, but remains up 14% for the year-to-date.
The S&P 500 index fell 3.1% last week, its biggest loss since the week ended December 21 and is now off 3.1% from a record close at 3,025.85 set on July 26, but is still up 17% for the year.
The Nasdaq Composite lost 3.2% for the week, also its biggest weekly loss since December 21, and is now off 3.9% from its record close of 8,330.21 on July 26.
Stocks reliant on business with China led the market down Friday. Apple, Caterpillar, Nike, and Cisco fell, dragging down the Dow and hurting the S&P 500.
Friday saw the pan-European STOXX 600 index drop 2.46%, the most for any day this year as the German and French market fell more than 3% and the Italian and London bourses lost well over 2%.
MSCI’s gauge of stockmarkets across the globe shed 1.18%.
Emerging market stocks lost 2.03% and posted their ninth-straight session of declines, while futures in Japan’s Nikkei lost 0.71%.
Safe-haven assets were bid across markets with German 10-year government bond yields dropping to an all-time low of -0.50% and the country’s entire government bond yield curve turning negative for the first time ever.
The yield on the US 10-year notes last rose fell to 1.8434%, from 1.892% late on Thursday. This week yields touched their lowest since Trump’s election in November 2016 and the benchmark bond posted its largest weekly drop since 2012.
Technology companies, which get a sizeable portion of their revenue from China, were the hardest hit, falling 1.7%. This sector was weighed by iPhone maker Apple Inc and chipmakers.
The Aussie dollar hit a low of 67.63 US cents in trading overnight Friday and rebounded to end at 68.02 US cents.
The driver for the slide on Thursday and Friday was Donald trump’s threat via a tweet to impose additional tariffs on $US300 billion of Chinese imports on September 1.
The July jobs report also had no impact – 164,000 new jobs – in line with economists’ forecasts while the jobless rate remained at 3.7% and the annual wage growth rose to 3.2% from 3.1% in June (but still below the 3.4% rate reached earlier this year).
