Investors on Wall Street are cautious. The United States (U.S.)economy is slowing down, increased tariffs have been imposed on steel and aluminum, and negotiations between the U.S. and China are not going smoothly.
On Wednesday, stock indices on Wall Street recorded only slight changes, as, after several days of rising stock prices, weak economic indicators led investors to be cautious.
The Dow Jones index weakened by 0.22 percent, to 42.427 points, while the S&P 500 strengthened by 0.01 percent, to 5.970 points, and the Nasdaq index by 0.32 percent, to 19.460 points.
The slight index movements show that investors, after recent euphoria, have become more cautious as a series of new reports indicates a slowdown in the growth of the U.S. economy.
Tariffs on steel and aluminum imports set at 50 percent
On Wednesday, it was announced that in May the private sector created the fewest new jobs in the last two years.
In the service sector, however, activity in May declined for the first time in nearly a year, while input prices in that sector increased. This shows that economic growth is slowing down while inflation remains elevated.
“The recently imposed tariffs will likely raise the prices paid by service companies,” said Jeffrey Roach, economist at LPL Financial.
On Wednesday, increased tariffs of 50 percent on steel and aluminum imports into the U.S. came into effect, and the deadline expired by which U.S. trade partners were to submit their best proposals for future trade terms to Washington in order to avoid reciprocal tariffs.
Negotiations with China not going smoothly
The main focus is on negotiations with China, which are not going very smoothly, but the relations are not as tense as they were immediately after U.S. President Donald Trump threatened massive tariffs on imports of Chinese goods.
This week, the White House said, Trump is expected to speak with Chinese President Xi Jinping.
“If an agreement is not reached with China, the tariff war will be the main topic on the market in the coming months and will have major consequences for both the U.S. and the global economy,” said Philip Blancato, director at Ladenburg Thalmann Asset Management.
And on European stock markets, share prices rose on Thursday. The London FTSE index strengthened by 0.16 percent, to 8.801 points, while the Frankfurt DAX rose by 0.77 percent, to 24.276 points, and the Paris CAC by 0.53 percent, to 7.804 points, Forbes writes.
