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China has threatened to retaliate against the U.S. for the order, which took effect Thursday and also subjects the Chinese telecommunications giant to strict export controls.
Friday’s session saw a big drop shortly after the opening bell, but those losses were pared before noon.
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Markets are headed for a tough week: The Dow Jones Industrial Average is on pace to be down four weeks in a row and on track for its longest losing streak in three years.
The trade conflict’s intensifying brinkmanship depressed investor sentiment.
Shane Oliver of AMP Capital said in a commentary that the trade issue “could still get worse before it gets better, but our view remains that a deal will ultimately be reached to resolve the issue given the economic (and in Trump’s case political) damage that would be caused if a deal is not reached,” according to The Associated Press.
The Bank of America analysts said Friday the trade war standoff is not just weighing on investor sentiment; it is hurting the U.S. economy.
“We think the latest brinkmanship around trade will slice 0.1pp from GDP growth this year, prompting us to lower our forecast to 2.5%. It will slightly boost core goods inflation, albeit on the margin,” the bank’s analysts said.
The yield on the 10-year Treasury was 2.37 percent.
Crude oil prices rose more than 1 percent to $63.53 per barrel.