U.S. markets were weak on Friday’s open following more uncertainty over trade developments with China. President Trump said the U.S. is not ready to strike a trade deal with China and that the U.S. government will no longer have any dealings with a major Chinese telecom company.
The ongoing dispute led to another volatile session with the major indexes hitting session lows midday. The slight rebound afterwards pushed the blue-chip into positive territory during the final hour of trading but the lower closes across the board gave the bears the weekly win.
The Russell 2000 sank 1.3% after tapping a first half low of 1,509 while closing back below its 200-day moving average. Prior and upper support at 1,510-1,500 was breached and held with a close below the latter signaling a retest towards 1,480-1,470.
The Nasdaq gave back 1% following the midday backtest to 7,910 and close back below the 8,000 level and the 50-day moving average. Shaky and upper support at 7,900-7,850 held with risk towards 7,800-7,750 on a move below the latter.
The S&P 500 was down 0.7% after trading to an intraday low of 2,914 and also closing back below its 50-day moving average. Near-term and upper support at 2,900-2,875 held with a close below the latter reopening risk towards 2,850-2,825.
The Dow declined 0.3% following the pullback to 26,097. Upper support at 26,250-26,000 was breached but held with a close below the latter signaling a possible retest towards 25,750-25,500 the 200-day moving average.
For the week, the Russell 2000 was lower by 1.3% and the Dow was down 0.8%. The Nasdaq fell 0.6% and the S&P 500 was off 0.5%.
Healthcare and Utilities were the only sectors that showed strength on Friday after edging up 0.1%. Technology, Communication Services, and Energy led sector weakness after falling -1.1%.
The best performing sectors for the week were Real Estate (2.6%), Utilities (1.1%), and Consumer Staples (0.7%). Energy (-2.5%) and Financials (-1.3%) were the leading laggards, followed by Technology (-1.2%) and Communication Services (-0.7%).