Wednesday’s Stock Market Open: US Equities Fall Amid Escalating Tensions Between US And China

U.S. stocks opened lower on Wednesday as diplomatic relations with Beijing worsened ahead of some key tech earnings.

The Dow Jones Industrial Average fell 37.16 points to 26,803.24, while the S&P 500 edged down 2.52 points to 3,254.78 and the Nasdaq Composite Index slipped 1.21 points to 10,679.15.

The U.S. State Department ordered the closure of the Chinese consulate in Houston, Texas, in order to protect American intellectual property and private information of its citizens. The foreign ministry in Beijing condemned the move and threatened countermeasures.

Traders are looking forward to earnings releases from Microsoft (MSFT) and Tesla (TSLA) after the closing bell.

U.S. President Donald Trump warned on Tuesday that the coronavirus crisis will probably “get worse before it gets better.” Thus far, the virus has infected more than 3.8 million Americans and killed at least 141,118 people.

The U.S. said will pay Pfizer (PFE) and German biotech company BioNTech (BNTX) $1.95 billion to produce and deliver 100 million doses of their jointly developed Covid-19 vaccine in the U.S. if it proves to be safe and effective in humans.

“I’m more concerned going into the August, September period: what’s going to then be the next catalyst to take the broader market higher,” said Andrew Sheets, a cross-asset strategist at Morgan Stanley.

It will be “a tougher period for stocks,” he added

Overnight in Asia markets finished mixed, as China’s Shanghai Composite index edged up 0.37%; Japan’s Nikkei-225 fell 0.58%; and Hong Kong’s Hang Seng Exchange plunged 2.25%.

In Europe markets traded lower, as Britain’s FTSE-100 fell 0.85%, while France’s CAC-40 tumbled 1.19% and Germany’s DAX dropped 0.53%.

Crude oil futures fell 1.31% at $41.37 per barrel, Brent crude dropped 1.11% at $43.83. Gold futures rose 0.28%.