By Yasin Ebrahim
Investing.com – The S&P 500 gave up gains on Thursday, easing from near three-month highs, on rising U.S.-China tensions after President Donald Trump said he would hold a news conference on Friday relating to China just as Beijing imposed a new security law in Hong Kong that threatens the city’s autonomy.
China’s National People’s Congress approved a national security law for Hong Kong that will crack down subversion, succession, terrorism, and activities by foreign forces that interfere in Hong Kong. The move has been widely condemned with governments of the U.S., Australia, Canada, and the U.K. expressing their concern.
Just a day earlier, U.S. Secretary of State Mike Pompeo said that Hong Kong no longer had a high degree of autonomy from China, throwing Hong Kong’s status as a trade hub into doubt and raising concerns that Washington and Beijing are headed on a collision course just months after both sides agreed a truce on trade.
The U.S. Labor Department reported that workers filed 2.123 million new unemployment claims last week, just above forecasts of 2.1 million, but below the prior week’s downwardly revised 2.446 million.
In another stark reminder of the Covid-19 pandemic’s impact on the economy, revised government data showed first-quarter GDP contracted at an annual pace of 5% rather than 4.8%.
The weaker backdrop for the economy, however, has had little sway on the broader market, with many betting on a second-half economic rebound amid optimism over the progress on reopening the economy so far.
As efforts to reopen the economy continue, healthcare stocks have caught a bid, with Moderna and Gilead (NASDAQ:GILD) leading the pack of drugmakers in the race to find a Covid-19 cure.
Moderna (NASDAQ:MRNA) jumped 6% after reaching a deal with CordenPharma for the supply of volumes of the lipids used to produce its coronavirus vaccine candidate candidate mRNA-1273.
Tech, meanwhile, slipped as social media stocks came under pressure on reports that President Donald Trump is set to sign an order seeking to limit the power of social media platforms like Twitter Inc (NYSE:TWTR) and Facebook (NASDAQ:FB).
Financials gave up some of their gains from earlier this week as investors seemingly took profit on bank stocks, with JPMorgan (NYSE:NYSE:JPM), Bank of America (NYSE:NYSE:BAC) and Citigroup (NYSE:C) trading below the flatline.
The earnings front, meanwhile, also supported sentiment amid mostly bullish quarterly reports from corporates.
Discount retailer Dollar Tree Inc (NASDAQ:DLTR) rose 12% after its first-quarter earnings topped consensus estimates as panic buying during the height of the pandemic demand boosted growth.
Cloud-based company Workday (NASDAQ:WDAY) surged 8% after first-quarter revenue beat estimates, rising 23% on strong demand for its cloud services offering.
Elsewhere, Boeing (NYSE:BA) was up 0.45% after detailing plans to cut 13,000 jobs and confirming that it would production of its maligned 737 MAX jets.
S&P Turns Negative as Trump Announces News Conference on China
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