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Sunday August 7th, 2022 8:51PM

Wall Street opens down as Pelosi's Asia trip unnerves market

By The Associated Press
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NEW YORK (AP) —

Stocks are falling on Wall Street Tuesday amid threats from Beijing over a possible visit by U.S. House Speaker Nancy Pelosi to Taiwan. The S&P 500 is off half a percent. The Nasdaq and Dow Jones industrials are also lower. Pelosi has said she is visiting Singapore, Malaysia, South Korea and Japan for talks on a variety of topics, including trade and COVID-19. China has warned of “serious consequences” if the trip to the island that it considers it’s own territory goes ahead. Uber shares are soaring after the rideshare operator reported strong second-quarter results. Starbucks delivers its own results later Tuesday.

THIS IS A BREAKING NEWS UPDATE. AP's earlier story appears below.

Wall Street is poised to open lower Tuesday as a possible visit by U.S. House Speaker Nancy Pelosi to Taiwan prompted threats from Beijing.

Futures for the Dow Jones industrials fell 0.5% and futures for the S&P 500 declined 0.6%.

China sees Taiwan as its own territory and has repeatedly warned of “serious consequences” if the reported trip to the island democracy goes ahead. Pelosi has said she is visiting Singapore, Malaysia, South Korea and Japan for talks on a variety of topics, including trade, COVID-19, climate change and security.

While there have been no official announcements, local media in Taiwan reported Pelosi will arrive Tuesday night, making her the highest-ranking elected U.S. official to visit in more than 25 years.

“The first big relief point will be Pelosi’s safe arrival in Taiwan, followed by her safe departure," said Stephen Innes, managing partner at SPI Asset Management. "No party wants a real war, but the risk of mishap or even aggressive war game escalation is real, which could always lead to a tactical mistake."

In Asian trading, Japan’s benchmark Nikkei 225 declined 1.4% to 27,594.73. South Korea’s Kospi slipped 0.5% to 2,439.62. Hong Kong’s Hang Seng dropped 2.4% to 19,689.21, while the Shanghai Composite dove 2.3% to 3,186.27.

Australia’s S&P/ASX 200 edged 0.1% higher to 6,998.10.

The Reserve Bank of Australia on Tuesday boosted its benchmark interest rate for a fourth consecutive month to a six-year high of 1.85%. It was the third consecutive hike of half a percentage point. When the central bank lifted the rate by a quarter percentage point at its monthly board meeting in May, it was the first rate hike in more than 11 years.

The cash rate is now at its highest point since May 2016 when the bank cut the rate from to 1.75% from 2%.

France's CAC 40 slipped 0.5% in early trading while Germany's DAX fell 0.6%. Britain's FTSE 100 inched up 0.1%.

On Monday, the S&P 500 gave up an early gain to end down 0.3% at 4,118.63. The Dow Jones Industrial Average dipped 0.1% to 32,798.40 and the Nasdaq fell 0.2% to 12,368.98. Smaller company stocks also gave back some of their recent gains, nudging the Russell 2000 0.1% lower to 1,883.31.

High inflation continues to drag on markets along with the potential for further interest rate hikes from central banks that could unintentionally push economies into a recession.

More than half of the companies in the S&P 500 have reported their latest earnings results, which have been mostly better than expected. However, companies have also warned that inflation is weighing on customer spending and squeezing operations. Businesses have been raising prices to try to keep up profits.

Uber jumped 14% in premarket after the ridesharing company said rides increased by 24% and revenue more than doubled in the second quarter as as Americans headed back to offices and are going out more as anxiety over COVID-19 eases.

BP shares rose 2.5% in premarket trading after the British energy giant reported that its earnings tripled in the second quarter as it profited from oil and natural gas prices that soared after Russia invaded Ukraine.

Wall Street will also get several updates on the job market, which has remained strong. The Labor Department will release its June survey on job openings and labor turnover on Tuesday and its closely-watched monthly employment report for July on Friday.

A surge in oil prices throughout the year only worsened the impact from inflation. U.S. crude oil prices are up roughly 25% in 2022 and that has raised gasoline prices in the U.S. to record levels.

In energy trading, benchmark U.S. crude gained 67 cents to $94.56 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 52 cents to $100.55 a barrel.

In currency trading, the U.S. dollar edged down to 130.97 Japanese yen from 131.71 yen. The euro cost $1.0232, down from $1.0259.

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