News of the arrest contributed to a volatile overnight session in the U.S. stock futures market. When futures opened overnight, there was an initial plunge lower on heavy volume which caused the exchange to halt trading. The CME Group said in a statement that “equity index futures and options markets paused intermittently following this evening’s open due to volatility.”
“Unfortunately until we get new news the market continues to be a cauldron of concerns causing caution with investors,” said Art Hogan, B. Riley FBR’s chief market strategist. “With the combination of he said Xi said on China trade, a fear of an economic slowdown in 2019, and the slow trickle of Mueller investigation reports coming out, it is not at all surprising to see a buyer’s strike in the after-hours market.”
Fears of a potential slowdown in economic growth also pushed stocks lower. On Monday, the yield on the three-year Treasury note surpassed its five-year counterpart. That bond-market phenomenon, known as a yield-curve inversion, is seen as a recession signal. But typically the recession doesn’t come until years after and many traders won’t see the inversion as official until the two-year yield rises above the 10-year yield.
Shares of major banks like J.P. Morgan Chase, Citigroup and Bank of America all closed lower by more than 1.5 percent on Thursday.
“The plunge in bond yields … tells us that unlike October, this is a true risk-off move,” said Ed Clissold, chief U.S. strategist at Ned Davis Research Group. “So while it is likely going to get worse before it gets better, the market action is getting closer to the panic selling seen as the market tries to find a bottom.”
Thursday’s moves come after the market was closed Wednesday as the nation remembered former president George H.W. Bush. The closure may have added to investor anxiety. On Tuesday, the Dow plunged 799 points.
Apple’s stock dropped 1.1 percent after UBS said in a note it sees the weakest “purchase intent” for the iPhone in five years. The bank cut its 12-month price target on Apple to $210 from $225.
The U.S. economy added 179,000 private jobs in November, below an estimate of 195,000, according to a report from ADP and Moody’s Analytics. The report comes ahead of the government’s monthly jobs report, which is scheduled for release Friday morning.
contributed to this report.
Clarification: This story has been updated to make it clear that Huawei CFO Meng Wanzhou was arrested on Dec. 1.