Tensions between the U.S. and China continue to affect stocks. This is worrying, as tensions between the two largest economies in the world represent a serious issue. Investors are closely monitoring the situation to learn more about the severity of the problem.
On Friday, not only mainland Chinese stocks but stocks the whole Asia Pacific markets fell as U.S.-China tensions worsened, and this is not good news. The Shanghai Composite fell by 3.86% to end its trading day at 3,196.77. At the same time, the Shenzhen Composite dropped by 5% to close at 2,138.36. Moreover, the Shenzhen Component declined by 5.31% to close at 12,935.70.
Also, Hong Kong’s Hang Heng index fell by 2.51% in the afternoon. Importantly, tech stocks fell across the board, with Tencent falling by 5.57% and shares of another Chinese tech giant, Alibaba, dropped by 3.16%.
Furthermore, Australia’s S&P/ASX 200 fell by 1.16% to close at 6,024.00. Also, South Korea’s Kospi index dropped by 0.71% to close at 2,200.44.
Notably, markets in Japan are closed for a holiday on Friday.
As a reminder, tensions between the U.S. and China are running high. Recently, the U.S. ordered China to close its consulate in Houston. Importantly, China responded by closing the U.S. consulate in the Chinese city of Chengdu. One day before China’s decision, the Secretary of State Mike Pompeo criticized China.
U.S. stocks on Thursday
On July 23, a sell-off in tech stocks, as well as worse-than-expected jobless claims data, also affected stocks.
Apple shares fell by 4.5% while shares of another U.S. tech giant, Microsoft, dropped by 4.3%.
Importantly, the Dow Jones Industrial Average fell 353.51 points or 1.3% to 26,652.33. At the same time, the S&P 500 dropped 1.2% or 40.36 points to close at 3,235.66. Moreover, the Nasdaq Composite dropped by 2.2% or 244.71 points to 10,461.42.
The U.S. and China should work together to de-escalate the situation, as there is no need to create additional pressure on the global economy.