Stocks tumbled Tuesday afternoon after House Speaker Nancy Pelosi landed in Taiwan’s capital Taipei high pressure standoff with china, He and other members of Congress were greeted on the tarmac by a contingent of Taiwanese officials.
In a statement shortly after the plane landed, Pelosi said her visit was to honor “the United States’ unwavering commitment to supporting Taiwan’s vibrant democracy.”
The S&P 500 fell 20 points, or 0.5%, to 4,098 in afternoon trading. The Dow Jones Industrials declined 0.8% and the Nasdaq 0.3%.
“Given Pelosi’s intended visit to Taiwan, tensions between the US and China are likely to intensify, and the risk of a crash is likely downplayed by markets,” analysts at TD Securities said in a client note.
China sees Taiwan as its territory and has repeatedly warned of “serious consequences” if an alleged visit by the Speaker of the House to the island democracy, who is second in the line of US presidential succession, goes ahead. . Pelosi has said she is visiting Singapore, Malaysia, South Korea and Japan for talks on a variety of topics, including trade, COVID-19, climate change and security.
Although no official announcement has been made, local media in Taiwan reported that Pelosi would arrive Tuesday night, making her the highest-ranking US official to travel in more than 25 years.
“The first major relief point will be Pelosi’s safe arrival in Taiwan, followed by her safe departure,” said Stephen Innes, managing partner at SPI Asset Management. “No side wants real war, but the risk of an accident or increased aggressive war play is real, which can always lead to a tactical mistake.”
More than half of the companies in the S&P 500 have reported their latest earnings results, which have mostly been better than expected. However, companies have also warned that the impact of inflation is putting pressure on customer spending and operations. Businesses are raising prices to try to maintain profits.
Uber jumped 14% in the premarket after the ridesharing company said rides grew 24% in the second quarter and revenue more than doubled as Americans moved back offices and concerns over COVID-19 ease. As more going out.
BP shares rose 2.5% in premarket trading after the British energy giant reported that its earnings tripled in the second quarter due to rising oil and natural gas prices after Russia invaded Ukraine.
Wall Street will also get a number of updates on the job market, which remains strong. The Labor Department will release its June survey on job openings and labor turnover on Tuesday and its closely watched monthly employment report for July on Friday.
The jump in oil prices throughout the year only worsened the effects of inflation. US crude oil prices have increased by about 25% in 2022 and this has pushed gasoline prices in the US to record levels.
In energy trading, benchmark US crude rose 67 cents to $94.56 a barrel in electronic trading on the New York Mercantile Exchange. Internationally, Brent crude rose 52 cents to $100.55 a barrel.