Wall Street fell 1.5 per cent on Friday with a drop in technology stocks sparking a turnaround from earlier in the day, as renewed concerns of the China-U.S. trade situation offset the effect of a jump in oil prices and a tepid U.S. jobs report.
The trade standoff between Washington and Beijing has been a major overhang on equities for most of this year and this week has seen the markets sell off on diminishing hopes that their truce, brokered last weekend, would help resolve differences.
These concerns were fanned on Friday by White House trade adviser Peter Navarro’s comments that U.S. officials would raise tariff rates if the two countries could not come to an agreement during the 90-day negotiating period.
Earlier, a Labor Department report showed nonfarm payrolls increased by a less-than-expected 155,000 jobs last month. The data was tepid enough to lower bets for faster future interest rate hikes without fanning fears of an economic slowdown.
Stock futures pared losses after the jobs report and the three major indexes moved higher shortly after the open. But the bump was short lived.
“Some of the major fears of economic slowdown (such as) the trade conflict and rising yields are coming back, and one piece of economic data is not enough for markets to bounce,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
The S&P technology and healthcare indexes slid more than 2 per cent, while the five other sectors, including trade-sensitive industrials, were down between 1 per cent and 2 per cent.
Apple Inc, Microsoft Corp, Amazon.com Inc and Alphabet Inc were all down 2 per cent or more and were the biggest drags on the S&P and the Nasdaq.
At 11:30 a.m. ET the Dow Jones Industrial Average was down