The markets started the week with a strong selloff as the Trump administration seems ready to push China even harder. Early this morning, the White House announced that they were preparing to restrict China from investing in US tech companies going forward. This sent the Dow 30 lower by 327, the S&P 500 lower by 37, and the Nasdaq 100 down 160.
The Nasdaq 100 was the hardest hit given its exposure to tech. The Nasdaq 100 broke its uptrend today, giving back nearly all its gains for the month of June in just one day.
Sector News:
Technology (XLK ) and semiconductor stocks (SMH ) were some of the hardest hit today given the news. The semiconductor space took the biggest blow with a loss of 2%. Technical traders noted the fallback to the support of the 200-day moving average.
Transportation stocks (IYT ) were another losing sector today thanks to a major drop in FedEx (FDX ) and United Parcel Service (UPS ). The continued trade war has hurt the transportation sector over concerns of a slowdown in the number of goods needed to be transported if the war continues. FDX and UPS account for 14% and 6.78% of the transportation sector respectively. Avis was the biggest loser in this group, falling 7%.
While the FAANG stocks are not technically a sector, as a group they weighed on the markets today. All of the names were lower on the day, with Facebook (FB ) falling 3%, Apple (AAPL ) falling 1%, and Netflix (NFLX ) losing 6.5%.
Stock News:
Harley Davidson (HOG ) shares made headlines today as the company responded to the European Union's tariff retaliation. In response to Trump's tariffs on European steel and aluminum, the EU raised duties on US \pmade motorcycles to a whopping 31% from 6%. This caused Harley Davidson to move manufacturing to other countries outside of the US. The company says this will cost them as much as $100 million this year and a forward cost of $2200 per sale, which they say they will not pass on to customers.
Micron technology (MU ) shares were one of the hardest hit chip stocks today, as the company has almost 60% of sales from China. The new concerns and uncertainty caused investors to run from Micron, pushing shares lower by 6.5%.
Campbell Soup (CPB ) shares popped 9% on news that they may have some interest in a take over from Kraft Heinz (KHC ). Though there are no details on the deal just yet, investors clearly saw the potential benefits, as Campbell Soup has struggled to gain market share with recent marketing efforts.
