US stocks lost their gains as tensions with Beijing ramped up after the Chinese Parliament passed a new law cracking down on political freedoms in Hong Kong.
- The Dow Jones Industrial Average fell 0.6pc after being higher in early trade
- Continuing unemployment claims in the US fell by 4 million last week
- European stocks gained, but Australian futures are pointing towards losses
China’s National People’s Congress approved a national security bill for Hong Kong, bypassing the Chinese territory’s parliament.
In response, US President Donald Trump announced he would be giving a press conference tonight on China.
Mr Trump also signed an executive order cracking down on social media companies, just two days after Twitter started fact-checking some of his tweets.
Mr Trump signed the order after attacking Twitter for tagging his tweets about unsubstantiated claims of fraud in mail-in voting with a warning prompting readers to fact check the posts.
He said the White House may “remove or change” a law known as section 230, so social media companies will not have a legal immunity, which protects the platforms from liability for content posted by their users.
It is being seen as extraordinary attempt to intervene in the media that experts interviewed by Reuters said was unlikely to survive legal scrutiny.
First Amendment lawyer Floyd Abrams told Reuters it was a historic intervention.
“In terms of presidential efforts to limit critical commentary about themselves, I think one would have to go back to the Sedition Act of 1798 — which made it illegal to say false things about the president and certain other public officials — to find an attack supposedly rooted in law by a president on any entity which comments or prints comments about public issues and public people,” he said.
Jack Balkin, a Yale University constitutional law professor said it was intimidation.
Some Democrats and Republicans also have pushed changes to the law.
Twitter’s shares lost 4.4 per cent, Facebook fell 1.6 per cent and Google’s parent Alphabet dropped 0.1 per cent.
US shares fall despite signs unemployment is troughing
The Dow Jones rose more than 200 points earlier in the trading session before falling on the news of the order and tensions with China.
It finished down 0.6 per cent at 25,401.
The S&P 500 lost just six points, or 0.2 per cent, to 3,030, and the Nasdaq Composite dropped 43 points, or 0.5 per cent, to 9,369.
The latest US unemployment claims data indicted the worst of the coronavirus economic damage could be over.
The US Labor Department said another 2.1 million North Americans filed for unemployment benefits last week, slightly more than predicted.
Continuing claims fell by nearly 4 million, the first drop since the virus outbreak.
The latest figures bring the number of people filing for jobless benefits since mid-March to 40.7 million.
April durable goods orders did not fall as much as expected, with the headline measure down 17.2 per cent over the month.
Pending home sales fell 21.8 in April.
European stocks ended higher with the FTSE 100, CAC 40 and DAX all rising more than 1 per cent.
However, Australian shares are set to fall on the open, with the ASX SPI 200 index down 0.3 per cent to 5,836.
The Australian dollar rose overnight on a weaker greenback, but slipped in morning trade to 66.3 US cents.
Spot gold was higher at $US1,718.50 an ounce.
West Texas crude gained 3 per cent to $US33.79 a barrel.