Investing.com - Here are the top five things you need to know in financial markets on Wednesday, July 4:
1. U.S. Markets Celebrate Independence Day
Trading volumes were likely to remain light with U.S. financial markets closed in observance of Independence Day.
The New York Stock Exchange will be shut. Fixed-income markets will also be closed.
Meanwhile, the CME Group’s Globex, which operates options and futures exchanges, will have only partial disruptions to its normal schedule. According to the company, its crude oil and energy markets will close at 1:00PM ET and reopen five hours later at 6PM ET.
Other global markets will operate on a normal schedule.
Currency markets are also operating as usual, though volumes will be lighter than normal.
2. U.S.-China Trade War Rumbles On
Chinese tariffs on $34 billion of U.S. goods will take effect from midnight Friday Beijing time, a person with knowledge of the plan told Reuters, amid worsening trade tensions between the world's two largest economies.
The Trump administration's own tariffs on $34 billion worth of goods from China are also due to take effect Friday, but owing to time differences, China's tariffs would kick in 12 hours sooner.
Washington and Beijing appeared increasingly headed toward open trade conflict after several rounds of negotiations failed to resolve U.S. complaints over Chinese industrial policies, lack of market access in China and a $375 billion U.S. trade deficit.
On Tuesday, a Chinese court temporarily barred Micron Technology (NASDAQ:MU) from selling 26 chip products in the mainland in a ruling over a patent infringement case with Taiwan's United Microelectronics Corp (UMC).
That came after the U.S. government moved to block China Mobile from offering services to the U.S. telecommunications market, citing national security risks.
3. Trade War Worries Drag World Stocks Lower
World stocks were dragged lower, as worries over a brewing trade war between the U.S. and China kept buyers on the sidelines.
Chinese markets led losses in Asia, with major markets in the region closing sharply lower. The Shanghai Composite lost another 1%, falling deeper into bear market territory.
Elsewhere, European markets were slightly lower, with most sectors and major bourses in negative territory. Technology stocks led the losses, tracking a slide in U.S. chipmakers overnight after U.S. peer Micron was banned from selling chips in China.
Major U.S. indexes gave up early gains to close the shortened Tuesday session in negative territory, as technology shares came under pressure.
4. Yuan Steadies Against U.S. Dollar
Away from equities, China's yuan bounced back from an 11-month low following moves by China's central bank on Tuesday to calm jittery financial markets.
The Chinese currency was modestly stronger at 6.6274 per dollar (USD/CNY) after People's Bank of China Governor Yi Gang said he was "paying attention" to "recent fluctuations in foreign exchange markets."
It sank through the 6.70-level per dollar on Tuesday, where traders and analysts had expected intervention from the central bank.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was a shade higher at around the 94.40-level.
Meanwhile, the pound ticked higher after a survey showed Britain's large services industry grew last month at its fastest rate since October, suggesting the economy might be strong enough for the Bank of England to raise interest rates next month.
5. Oil Prices Edge Up As U.S. Supply Tightens
Oil prices edged up, lifted by a report of declining U.S. crude stockpiles.
U.S. West Texas Intermediate crude futures were last at $74.05 per barrel, after rising above $75 for the first time in more than three years on Tuesday.
Brent crude oil futures were at $77.95 per barrel, up 16 cents from their last close.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 4.5 million barrels last week. The API data also showed supply declines of roughly 3.1 million barrels in gasoline and 438,000 in distillates.
Supply data from the Energy Information Administration will be released Thursday morning, a day later than usual because of today's Independence Day holiday.