Dow plunges 500 points after Trump’s Tweets – Here’s what you need to know…

Stock Market Update Monday, May 6th, 2019

Things looked UGLY this morning!

Stocks were down big after President Trump sent out 2 tweets threatening to increase tariffs on Chinese imports.

Traders thought a trade deal was pretty much wrapped up, just needing to be finalized.

But over the weekend, Trump said that he will raise tariffs to 25% (from 10%) on $200 billion worth of Chinese imports. The increase is set for Friday.

With new trade concerns, the S&P opened the day with a 1.3% loss and the NASDAQ was down 2.2%. The sell-off wasn’t just in the U.S. either. The Chinese Shanghai Composite lost 5.6% on the news.

But after the initial shock, stocks rallied on news that a Chinese delegation is coming to the U.S. this week to talk about trade.

With traders wondering if the tweets were more of a negotiation “tactic” than anything, the fear in the morning wore off, and the major indices worked their way higher for most of the day. 

Although the major indices finished with a loss, it could have been a lot worse! The DOW made an impressive 405 point reversal off of today’s lows and finished lower by just 66 points. 

Here’s where the major indices ended the day:

  • The S&P finished with an 0.5% loss. Down 13 points, the S&P ended at 2,932.
  • The DOW ended lower by 0.3%. Dropping 66 points, the DOW closed at 26,438.
  • The NASDAQ was down 0.5%. With a 41 point loss, the NASDAQ finished at 8,123.

Crude Oil (CL) started the day with losses but bounced back just like stocks. Up 0.6%, CL ended at $62.30 a barrel.

Lyft (LYFT) will report earnings tomorrow after the bell. It’s the first time Lyft will report earnings since it became a publicly traded company.

We’ll also hear from Anheuser Busch (BUD), Crocs (CROX), and Mylan (MYL).

Here is the economic calendar for the week:

Real Time Economic Calendar provided by Investing.com.

This Stock Market Update was provided by Rockwell Trading Services LLC.

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