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NEW YORK (AP) Wall Street drifted Wednesday after a rally that had been up 16% for the year so far.
The S&P 500 was down 0.2% during afternoon trading, falling from its highest level since April 2022. The Dow Jones Industrial Average was down 114 points, or 0.3%, to 34,304, at 12:30 p.m. Eastern time, and the Nasdaq composite was down 0.1%.
Other markets around the world fell more sharply after the latest discouraging signal from the Chinese economy. Growth in China’s services sector has slowed more than economists had expected last month. It is the latest evidence showing that the world’s second largest economy is recovering after the lifting of anti-COVID restrictions.
China rejects criticism of racist remarks by its top diplomat. At a forum on Monday, Wang Yi said that Europeans and Americans could not distinguish between Chinese, Koreans and Japanese.
Jordan has built a gigantic power plant intended to fulfill the great hope of energy independence. But the kingdom’s desert oil shale station has pushed the country into debt to China.
Asian stock markets are lower after a survey found Chinese industrial activity weakened. Shanghai, Tokyo, Hong Kong and Sydney withdrew on Wednesday.
China has imposed export restrictions on two metals used in computer chips and solar cells, extending a spat with Washington over high-tech trade ahead of Treasury Secretary Janet Yellen’s visit to Beijing this week.
Meanwhile, the US economy has remained stronger than many investors feared. It defied forecasts of a recession because of a job market that has remained remarkably solid despite much higher interest rates designed to bring down inflation.
A report on Wednesday showed US factory order growth held steady in May, although economists expected an acceleration.
Hopes are rising that inflation will cool enough to get the Federal Reserve to end its rate hikes soon, which undermined inflation by slowing the entire economy. The Fed may provide some guidance on its next steps later this afternoon when it releases the minutes of its latest meeting.
At that meeting, the Fed decided to keep interest rates stable. It was the first time in more than a year that it refrained from rate hikes, but it also hinted it could make two more hikes by the end of 2023.
Prior to the publication of the minutes, bond market returns were mixed. The 10-year Treasury yield rose to 3.92% from 3.86% on Monday, as bond trading halted early ahead of Independence Day. The 10-year yield helps determine rates for mortgages and other major loans.
The two-year Treasury yield, which moves more than expected for the Fed, fell from 4.94% to 4.93%.
On Wall Street, stocks of UPS fell 1.7% as the company tried to strike a deal with the Teamsters union representing approximately 340,000 of its employees. Their current contract expires at the end of the month, and Teamsters members voted for a strike permit last month.
Companies that do a lot of business in the Chinese region were also weak. Las Vegas Sands and Wynn Resorts, which derive significant chunks of revenue from Macau, both fell at least 4%.
On the winning side was Meta Platforms. The parent company of Facebook, Instagram and WhatsApp seems poised to unveil a new app that seems to mimic Twitter. It was up 3.1%, adding to a great year where it was already up almost 145%.
On the foreign exchanges, indices in Hong Kong fell by 1.6% and in Shanghai by 0.7% on the back of discouraging economic data from China. This led to additional concerns about the high tensions between China and the United States, the two largest economies in the world.
Beijing this week announced restrictions on the export of gallium and germanium, two metals used in making semiconductors and solar panels. Treasury Secretary Janet Yellens thought so visit this week as part of US efforts to mend strained relations.
Equities fell 0.3% in Japan, 0.6% in South Korea, 0.8% in France and 0.6% in Germany.
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AP Business Writers Matt Ott and Joe McDonald contributed.
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