After a week of substantial gains, Wall Street has ended in a decidedly subdued position as investors responded to US-China tensions as well as continued uncertainty regarding the pace of US economic recovery from the Coronavirus pandemic.
The United States President Donald Trump warned on Tuesday that his country would respond strongly to the national security law proposed by China in relation to Hong Kong, raising concerns that Washington and Beijing may possibly renege on their phase one trade deal.
The US Commerce Department added thirty-three Chinese companies and other institutions to its blacklist, citing human rights violations and national security concerns, which prompted Wall Street stocks to edge ever lower and erase the week's positive momentum.
The increasing frequency of rhetoric and statesmanship between the US and China has seen fit to topple Wall Street’s multi-month highs, offsetting potentially good news concerning the easing of Coronavirus business restrictions.
"We still think COVID-19 concerns are in the driver's seat, but we could see US-China relations move back into the front seat." Said Eric Freedman, chief investment officer at US Bank Wealth Management.
The team at Tower Technology is observing these recent events closely. There is a very real possibility that the remainder of this year will impact the confluence of the financial world in a manner that will echo for decades to come.