Market Snapshot: Dow sags ahead of Memorial Day weekend as investors watch China-U.S. tensions

On Thursday, the Dow DJIA, -0.41% fell 101.78 points, or 0.4%, at 24,474.12, while the S&P 500 index SPX, -0.77% ended off 23.10 points, or 0.8%, at 2,948.51. The Nasdaq Composite Index COMP, -0.96% fell 90 points or 1% to end at 9,284.88.

For the week, the Dow has climbed 3.3%, the S&P 500 has returned 3% and the Nasdaq Composite Index has risen 3%, as of Thursday’s regular close of trade.

What’s driving the market?

The main equity benchmarks have gained sharply for the week with returns pegged to optimism surrounding states’ reopenings. President Donald Trump said Thursday that he would not move to shut down the U.S. economy to stem the spread of a potential second wave of COVID-19.

“We are going to put out the fires. We’re not going to close the country,” he said, speaking at a Ford MotorF, +2.55% factory in Michigan.

Late Thursday, Universal Orlando executive John Sprouls asked Orange County Mayor Jerry Demings for approval to open the company’s theme parks as early as June 5, the Orlando Sentinel reported.

Expectations that a vaccine will be developed for COVID-19, which has infected more than 5 million people and claimed 330,000 lives worldwide, according to data compiled by Johns Hopkins University, have buoyed assets perceived as risky.

However, the week hasn’t been without drama, with increasing worries about U.S.-China relations, which have deteriorated in recent weeks, capping further gains for risk assets.

U.S. lawmakers approved a bill aimed at censuring China’s move to impose new national-security laws on Hong Kong, and on Wednesday, the Senate, separately, passed legislation that could have the effect of banning Chinese companies from listing on U.S. exchanges.

Rising tensions between the U.S. and China come as markets in the U.S. will be closed on Monday for Memorial Day, and the bond market will close an hour early at 2 p.m. Eastern on Friday and remain closed until Tuesday.

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