Market Watch – Oct. 19, 2018
U.S. Stocks Plunge Over Saudi Tensions, Global Growth Concerns
U.S. stocks fell sharply Thursday as fresh declines in technology shares dragged major indexes lower over concerns of slowing global growth, geopolitical tensions and rising U.S. Treasury yields. U.S. declines accelerated midday Thursday after Treasury Secretary Steven Mnuchin announced his withdrawal from an investment conference in Saudi Arabia amid mounting speculation that the kingdom may be involved in the disappearance and suspected death of dissident journalist Jamal Khashoggi. The S&P 500’s utilities and real estate sectors, a favorite with jittery investors for their sizable dividends, both registered gains.
Fueling concerns over waning growth, China’s benchmark stock index skidded to four-year lows on Thursday. Chinese equities were pummeled, with the nation’s premier warning that the economy could struggle, amid worries over the impact of an escalating tariff war with the U.S. China’s benchmark Shanghai Composite Index surrendered as much as 2.6%. Meanwhile in Europe, worries over the lack of progress in Brexit talks and Italy’s budget plans also contributed to negative sentiment. In Canada, many cannabis stocks hit all-time highs Tuesday, the day before legalization, then fell sharply in early trading Wednesday, dragging the health care sector down. But most stocks clawed their way back, finishing the trading day down just slightly.
Turning to oil, Brent crude fell below the $80-a-barrel threshold for the first time in nearly a month on Thursday, after data showed an unexpected rise in U.S. inventories. In late Thursday trading, oil had fallen to the $68 mark. Prices have come under pressure over the past week, amid global market turmoil, U.S. surpluses and signs of slowing demand.