Stocks were slipping Tuesday amid rising geopolitical tensions, as House Speaker Nancy Pelosi is set to arrive in Taiwan despite stern warnings from China.
Futures for the Dow Jones Industrial Average retreated 120 points, or 0.4%, after the index shed 46 points Monday to close at 32,798. S&P 500 futures signaled a start 0.5% into the red, with the tech-stock-heavy Nasdaq poised to fall 0.6%.
Investor sentiment has weakened ahead of Pelosi’s (D., Calif.) expected visit to Taiwan Tuesday as part of her tour of Asia—a historic visit that has raised geopolitical tensions amid warnings from China. The world’s second-largest economy considers the island part of its territory and has plans for reunification, and cautioned that its armed forces “will not sit idly by” in the case of Pelosi’s visit.
In addition to heightening tensions between the U.S. and China, the House speaker’s visit underscores the economic sensitivity of Taiwan, which stands at the heart of the critical global chip-making industry.
“Nancy Pelosi’s visit to Taiwan today for meetings tomorrow could be the main event,” said Jim Reid, a strategist at Deutsche Bank. “She’s scheduled to land tonight local time which will be midmorning U.S. time. She’ll be the highest ranking U.S. politician to visit in 25 years. Expect some reaction from the Chinese and markets to be nervous.”
Here are two stocks on the move Tuesday:
BP (ticker: BP ) gained 3% in U.S. premarket trading as the group became the latest oil giant to report its best quarter in years amid soaring energy prices. BP saw adjusted profit surge to $8.5 billion in the prior quarter, up from $2.8 billion in the year prior and well ahead of analysts’ expectations.
Taiwan Semiconductor Manufacturing Co. (TSM) lost 2% in the premarket after a 2.5% tumble Monday, as shares in the world’s largest chip maker weakened ahead of Pelosi’s visit to Taiwan.
Write to Jack Denton at email@example.com