The US stock market declined in May as US-China trade talks remained the dominating theme, with earnings, interest rates, and Brexit also impacting investor sentiment.
The tech-heavy NASDAQ Composite declined the most among the three benchmark indexes, falling by 7.41% mainly on the back of trade concerns. The S&P 500 and Dow Jones Industrial average lost 5.87% and 6.11%, respectively.
The month kicked off with the Federal Open Market Committee maintaining interest rate levels. Markets reacted positively to the decision as well as the Fed’s statement that economic growth and job creation were somewhat stronger than anticipated. April non-farm payroll data showed 263,000 jobs created, much higher than the expectation of 180,000 and the previous month’s figure of 189,000. First-quarter GDP grew by 3.1%, beating the consensus estimate by 0.1 percentage point.
Meanwhile, US-China trade talks seemed to move nowhere. Trade tensions increased after President Trump said China “reneged” on its promises to make changes to its economic practices and slapped tariffs of up to 25% on $200 billion worth of Chinese goods. Beijing retaliated by targeting $60 billion worth of US goods. Eyes are now on the G20 summit in Osaka at the end of June, where President Trump and China’s leader Xi Jinping are expected to meet.
On the other side of the Atlantic, Brexit drama continued to unveil. After appealing to the Parliament with a new repackaged deal and failing to win support, British Prime Minister Theresa May announced that she will resign on June 7. There are 13 people that declared their intention to run for the opening, including one of the main proponents of Brexit, former Foreign Secretary Boris Johnson, who is currently the frontrunner...