Stocks open lower amid US trade tensions
The surprise announcement from the White House comes at a tenuous time for trade relations between the United States and its trading partners, including the European Union and China.
The Dow Jones industrial average fell 65 points at the opening bell, with losses in Goldman Sachs and Chevron dragging the index lower. The S&P 500 dropped 0.15 percent as a continued drop in crude prices weighed on energy stocks.
The Nasdaq composite was largely unchanged as gains in Netflix and Microsoft were offset by losses in Amazon and Facebook.
Uncertainty surrounding international trade returned to Wall Street Thursday after the Commerce Department said Wednesday night that it started an investigation into whether automobile imports "threaten to impair the national security" of the United States.
"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Commerce Secretary Wilbur Ross said in a statement.
The Commerce Department said the investigation "will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States, including by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies."
The possibility of additional import taxes isn't likely to help already stressed trade negotiations between the U.S. and countries like Japan, Germany and South Korea, all major participants in the international automobile market.
These broad trade statements from the White House "start with hyperbole and end with something people can accept," said JJ Kinahan, chief market strategist at TD Ameritrade. "There's a lack of volume as people start to head away for the weekend. It seems like just something to trade on."
Japan's Nikkei 225 fell 1.1 percent while the Stoxx Europe 600 traded down 0.1 percent, with shares of BMW and Volkswagen each down more than 2 percent.
Shares of electronics and technology retailer Best Buy fell more than 5 percent Thursday morning after the company reported quarterly earnings. Though the company posted solid quarterly comparable sales and earnings, its online sales growth decelerated.
Domestic online comparable sales growth slowed to 12 percent growth in the U.S. from a year ago, compared to 22.5 percent growth.
Best Buy's chief financial officer, Corie Barry, added that the company is not upgrading its full fiscal year outlook during the earnings conference call.
U.S. stocks finished slightly higher on Wednesday after the Federal Reserve announced it would be comfortable letting inflation temporarily run above its target. The Dow Jones industrial average added more than 50 points at the close, with the Nasdaq and S&P 500 indexes also notching modest gains.
Specifically, the minutes said "a temporary period of inflation modestly above 2 percent would be consistent with the Committee's symmetric inflation objective."
Though the general tone was that inflation would continue to rise, there was disagreement over how confident the Fed should be after undershooting its target for so long, with some members amenable to letting the prices climb higher.
All signs continued to point at a tight labor market, with Thursday's data on new applications for U.S. unemployment rising just slightly to 234,000 for the week ended May 19.