The Dow sold off thanks to a series of issues that hit stocks on Monday. Amazon was down due to pressure from Trump. Intel was off after rumors that Apple would start using its own chips for some Mac computer functions, Tesla was lower over production concerns and piling on top of all that was China upping the ante in the trade war by putting tariffs on imported US agriculture products. China and the US appear to be posturing while they line up trade negotiation meetings. At the close the Dow suffered from “DC-Dysfunction” and fell 459 at 23,644 on heavy volume. Volume was generally weak on the way down but after markets bottomed a rally set in and volume rose. Still it was an ugly day. Spotify comes public tomorrow.
Economic data continues to look good although a trade war could potentially change that dynamic. Companies continue to increase earnings estimates and the IHS Markit U.S. manufacturing PMI rose to 55.6 in March, its highest level since 2015. In line with this data the ISM manufacturing index reached 59.3 last month. Economists expected the number to hit 60.0.
WTI crude oil was down 2.7% to $63.18 per barrel as fears of a lower global economic growth rate might lead to over supply for a longer period of time. The US - China trade spat is causing the slowdown concern while Russia continues to increase production as do US drillers which is causing the supply concerns. Countering the supply issue are Saudi Arabia, which is holding the line on production and Iran which is facing possible sanctions for ballistic missile tests.