As we close the final trading day of the week, month, quarter and half year, what may have been the most astounding event from this past week, outside of the rockin’ and rollin’ on Wall Street, was the elimination of the reigning world champion Germany from the World Cup, courtesy of South Korea – it isn’t just the markets that have been a wild ride.

The Markets — Tech Stocks Take a Beating

This week the trade-war-induced market turbulence continued, but with a new twist as technology stocks got pulled into the battle. Investors had previously treated tech stocks as relatively immune, (which we’ve argued was incorrect) from the trade tirades between China, Europe, the US and Canada, which had left the Dow Jones Industrials down -0.6% for 2018 at the start of the week, while the tech-heavy Nasdaq was up over 11%. That changed this week with President Trump’s move to bar Chinese ownership of U.S. companies and ban some technology exports to China.

Monday a tech-centric stock selloff left the S&P 500 to close at its lowest level in June, down -1.4%, while the Nasdaq also closed down -2.1%, its worst day in nearly 2 months, and the Dow Jones Industrial Average fell -1.3%. The safety play returned with the Utilities sector gaining +1.7% while Consumer Discretionary slumped -2.2%. The talk of tech export bans and baring Chinese ownership of US companies pushed tech stocks such as Micron Technology (MU) down -6.9%, Autodesk (ADSK) down -5.0% and Nvidia (NVDA) down -4.7%.

The flight to safety pushed the 10-year Treasury bond yield to 2.9%, its lowest since the end of May and commodities finished in the red as well, with copper making fresh 2018 lows, despite a weaker US Dollar, and the VIX jumped by 26% for its highest close since April. Chip manufacturers were also getting hit on talk of trade war, with companies like Applied Materials, Lam Research (LRCX), ASML Holding (ASML) and KLA-Tencor (KLAC) particularly vulnerable.

Monday a victim of our Clean Living investing theme made the headlines with the beleaguered Campbell Soup (CPB) gaining +9.4% on Monday on news that Kraft Heinz (KHC) is interested in acquiring it. CPB cut its earnings forecasts at least three times in the past 12 months, saw its CEO Denise Morrison abruptly retire and a strategic review kick off. Over the past year shares of CPB have fallen -21.2% while the S&P 500 has gained +11.4% – not exactly premium pricing at the moment. As consumers are becoming more and more focused on health-conscious products, CPB is looking at a long uphill battle to reinvent itself.

Tuesday the major indices recovered a wee bit (technical term), with the S&P 500 closing up +0.2%, the Russell 2000 outperformed again, closing up +0.7% and the Nasdaq sat in the middle, up +0.4%. Volatility rose as well, with the VIX closing up +3.0%. China’s Shanghai Composite continued to fall on the tit-for-tat trade war barbs.

Wednesday started off with the Dow leading a strong rally. By late morning it was up 286 points, but once again trade war talk sucked much of the enthusiasm out of the markets as White House economic advisor Larry Kudlow gave an interview on Fox Business.

“I believe that China is operating from a greater position of weakness than folks think. We are operating from a great position of economic strength.” – Larry Kudlow on Fox Business in the 11am ET hour

The Dow fell 453 points from the day’s peak, ultimately closing the day down 166 points, (-0.7%) to close below both its 50-day and 200-day moving averages. The S&P 500 lost -0.9% to close below its 50-day moving average and the Nasdaq lost -1.3% on rising volume. Semiconductors were the hardest hit within tech given their exposure to China, losing -1.3%. Nine of eleven sectors closed in the red, with just energy and utilities closing in positive territory. The US Dollar closed at a 52-week high and the 10-year Treasury yield fell 5 bps to 2.82%, the lowest level in a month.