U.S. Futures Fall And European Stocks Cut Gains

European stocks rose at the end of the week as implications of economic recovery in China gave investors hope. However, the increases were cut and the future of US stocks took a downturn after the US Commerce Department was reported to be taking steps towards blocking semiconductor shipments to Huawei.

The US Commerce Department was reported to be strategically targeting the company’s purchasing of semiconductors that were produced as a result of US technology.

What Is The Cause Of Market Movements?

On Thursday, US stocks experienced a dramatic recovery after a number of states lifted their lockdown measures. The Dow Jones Industrial DJIA ended 1.6% higher at 377 points after a turnaround of 800 points.

The increase came about despite reports demonstrating that 2.9 million US citizens have lost their jobs in the previous week, bringing the total to over 36 million people during the COVID-19 pandemic.

China’s positive recovery signs also drove stocks upwards in the first monthly increase of the year.

In April, industrial stocks increased by 3.9%, surpassing economists’ predictions that stocks would rise by only 1%.

Despite this, retail sales experienced a drop of 7.5% this month, which is a slight improvement on March’s 15.8% drop.

Despite the positive signs, sentiments were soured by news of the US Commerce Department’s blocking of shipments to Huawei.

Michael Hewson, an analyst for CMC markets, said that China’s progress should be a warning for investors.

He said: “While we saw some nuggets of an improvement in the latest China data, the fact that retail sales numbers were still sharply negative for the third month in a row should act as a warning to those hoping for a swift rebound in economic activity as lockdown measures here are loosened, that any recovery is likely to be slow and hard-won.”

Stocks To Keep An Eye On

After significant losses from earlier in the week, travel stocks experienced a sharp rebound. EasyJet experienced a rise of 6.9%, Carnival increased by 7.9% and InterContinental Hotels Group rose by 2.6%.

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