Overseas Market Report
US stocks have fallen on renewed uncertainty regarding the US stance on Chinese investments in American technology companies, reversing gains earlier in the session. At the market open, stocks rose as President Donald Trump said he will use a strengthened national security review panel — the Committee on Foreign Investment in the United States (CFIUS) — to deal with potential threats from Chinese acquisitions of US technology, instead of imposing China-specific restrictions.
The decision was seen by investors as a somewhat softer approach than plans reported earlier to block firms with at least 25 per cent Chinese ownership from buying US tech firms. But later on Wednesday, White House economic adviser Larry Kudlow said in an interview on Fox Business Network that Trump’s announced plan did not indicate a softened stance on China. The S&P 500 technology sector fell 1.5 per cent, weighing the most on the broader S&P 500 index. Chipmakers, which derive much of their revenue from China, fell even more. The Philadelphia semiconductor index slid 2.5 per cent.
Stocks were pressured further by a rise in the US dollar. A jump in oil prices to their highest in more than three years boosted the S&P 500 energy index 1.3 per cent, but some investors raised concern that they may have a negative effect on other sectors. The Dow Jones Industrial Average fell 0.68 per cent, to 24,117.59, the S&P 500 lost 0.86 per cent, to 2,699.63 and the Nasdaq Composite dropped 1.54 per cent, to 7,445.09.Traders Edge - 28 June 2018