Stocks rose Wednesday and pushed passed earlier concerns over increasingly tense U.S.-China relations, which had sent the S&P 500 and Nasdaq into negative territory earlier in the session.
Secretary of State Mike Pompeo said Wednesday morning that the U.S. certified that Hong Kong was no longer political autonomous from China, following new national security measures from Beijing that would encroach on the region. Pompeo’s remarks carry major implications for Hong Kong’s previous special trading status with the U.S., and China has previously threatened to retaliate if the U.S. stepped in over Hong Kong.
A day earlier, Bloomberg reported that U.S. officials were considering sanctioning Chinese officials and entities enforcing the national security law.
These developments add to mounting tensions between the U.S. and China, with relations already strained as the past years’ trade war played out and the coronavirus pandemic that began in China spread across the world.
Also on Wednesday, the U.S. House of Representatives closed in on passing legislation already cleared by the Senate that would give authority to impose sanctions on Chinese officials for human rights abuses against Muslim minorities in China, in another move that could spark the ire of Chinese officials.
Meanwhile, more positive economic data showing stabilizations in U.S. consumer confidence and a rebound in the housing market April helped push stocks higher earlier this week. Wednesday’s weekly mortgage applications report showed mortgages for home purchases rose on a weekly basis for a sixth straight week, and to the highest level since mid-March.
Some analysts have struck a more cautious tone on the direction of the stock market in the very near-term, however, even as conditions improve off last month’s lows.
— Yahoo Finance