This article was originally published on ETFTrends.com.
Technology stocks were among the hardest hit areas of the market on Tuesday as the sector has come under pressure amid rising anxiety over the U.S.-China trade spate and speculation of a global recession, the Wall Street Journal reports.
U.S. markets and stock exchange traded funds were mostly flat Tuesday as fears of a slowing global economy weighed on risk sentiment.
Weakness out of China weighed on sentiment. China producer prices fell last month at their sharpest rate in three years as the second largest economy in the world deals with a protracted trade war with the U.S., Reuters reports.
“The weakness coming out of China reflects a slowing economy as a result of trade negotiations,” Bucky Hellwig, senior vice president at BB&T Wealth Management, told Reuters.
“The consensus is that time is on the side of China, but in the short term, as they see their economy slow and as supply chains shift, that puts pressure on them to get a deal done,” Hellwig added.
The Labor Department revealed U.S. job openings fell for a second straight month in July, highlighting a hiring slowdown and potentially signalling that companies are growing more cautious. Job openings, a closely watched gauge of the labor market health, decreased by 31,000 to a seasonally adjusted 7.2 million in July.
“The U.S. economy is doing just fine with the consumer very strong, while unemployment is still low,” Thomas Martin, senior portfolio manager at Globalt Investments, told the WSJ. “How central banks act and what their language is will give a clue as to whether or not there’s a sustained potential for an economic recovery or whether we’re still on the edge with risk to the downside.”
Looking ahead, investors anticipate the Federal Reserve will continue to ease its monetary policy in support of the domestic economy. Many expect the Fed to cut rates by at least 25 basis points when it meets next week after the weaker-than-expected August jobs report fueled rising speculation of further cuts.
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