Stocks Fall on China Tensions

By:
Chris Gaetano
Published Date:
May 22, 2020
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Major stock indices are down, seemingly reacting to recent ramp ups in tension between the United States and China.

As of 11:01 a.m. the Dow Jones Industrial Average was down by 146 points, the S&P 500 was down by 12 points, and the Nasdaq was down by 23 points.

Bloomberg said traders have been spooked by China's recent announcement that it was going to escalate its crackdown on Hong Kong,—which they believe will exacerbate already high tensions with the United States—as well as the country's announcement that it will be suspending GDP targets amid major economic uncertainty.

Likely not helping matters is that, while traders had often driven rallies on the hopes that businesses reopening would provide a boost to the economy, the Wall Street Journal is reporting that many are finding that being open presents a whole new set of challenges that businesses are ill-prepared to meet. Far from roaring back with a vengeance, business owners are struggling with how to make money amid rising safety costs (e.g. for personal protective equipment and spending more time and money on cleaning), caps on how many customers are allowed in at once, sky-rocketing supply costs (especially for those in the food business) and a lingering discomfort many still feel about shopping in public. Some businesses have responded by adding pandemic surcharges but these have occasionally sparked public backlash, which makes others hesitant to do the same.

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