On Wednesday, the 29th of May 2019, all three key indexes of Wall Street had extended their losing streak, and hit a fresh three-month low, while investors had been found rushing on to the safety of government bonds, leaving risky assets behind in the wake of a withering trade dispute between United and China.
Besides, investors’ optimisms evaporated further and risk-appetite witnessed a sharp moderation, after US President Donald Trump had said on Monday (May 27th) that he had not yet been prepared to make a deal with China over trade and a flurry of Chinese local newspapers had headlined that China might use rare earth elements (REE) as a leverage in its trade conflict with United States.
In point of fact, China had been producing about 95 percent of rare earth elements required in high-tech facilities and chipmaking for over a decade. Fanning the flames further, Huawei Technology had filed a lawsuit against US government at its latest attempt to battle against a US sanction designed to throw it out of the global telecommunication market.
Referring to a tempestuous outlook among the investors, a senior portfolio manager at GlobAlt Investment in Atlanta, Tom Martin said, “The question about what China will do with rare has always been there, it is certainly alarming and ratchets up the level of uncertainty.
It’s a flight to safety in the United States. There are fears that are driving investors to Treasuries and you have a market that reached its peak about a month ago”. Quoting statistics, at Wednesday’s (May 29th) market wrap-up, S&P shed 0.69 percent to 2,783.02, Dow fell 0.87 percent to 25,126.41, and Nasdaq was jolted 0.79 percent to 7,547.31, meanwhile cyclical goods & services alongside utilities remained among the worst-performing majors with losses of more than 1.15 percent at Wednesday’s (May 29th) market round out.