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US stocks have fallen sharply since January as investors remain optimistic about President Donald Trump's threat to raise tariffs on billions of dollars worth of imports from China. Oil dropped and the yen strengthened.
The S & P 500 sank for a second day, down 2%, while it was thought that the imposition of additional royalties would have a negative impact on the global economy . China's chief trade negotiator is still planning to travel to Washington later this week, as Trump steps up the pressure to reach an agreement that many market participants say has hardly been reached. The Stoxx Europe 600 index closed at its lowest level in five weeks. Korean and Japanese equities slid as both markets reopened after the holidays, although shares in Shanghai and Hong Kong rose.
"Even though we have had good news overnight (that China's chief negotiator will join the team that came to the United States this week to participate in the negotiations), there is a good chance that we Attending an increase in tariffs on China, "said Matt Maley, equity strategist at Miller Tabak + Co., in an email to his clients. "Therefore, a break is in order right now."
The euro weakened after the European Commission cut its growth forecast for the eurozone and warned that rising trade tensions could worsen the outlook. Bonds in the region have increased. Oil dropped to around $ 60 a barrel, joining a drop in global stock markets as Trump's latest pricing threats raised the stakes of the US-China trade war.
Investor sentiment remains fragile as traders wait for the next development of the trade conflict between the two largest economies in the world. The Chinese government confirmed Tuesday that Chinese Vice Premier Liu He will travel to the United States for trade talks on May 9th and 10th. At the same time, the country would be setting retaliatory tariffs on US imports if Trump threatened new rights. The latest turn establishes Thursday as potentially a key moment of the trade war that has lasted for a year.
Elsewhere, the Turkish lira and shares collapsed as investors interpreted the decision to reinstate the municipal vote in Istanbul as a new manifestation of President Recep Tayyip Erdogan's influence on independent institutions. The Australian dollar strengthened after the country's central bank abstained from lowering rates.
Here are some notable events to come:
– The Reserve Bank of New Zealand meets Wednesday.
-China publishes its trade data on Wednesday, and the United States on Thursday.
South Africa is holding national elections on Wednesday. China reports on inflation on Thursday.
-The United States releases the April CPI report on Friday.
– A Chinese trade delegation is expected to arrive in Washington for talks.
These are the main movements on the markets:
stocks
The S & P 500 Index fell 2% at 13:33 New York time, while the Nasdaq Composite Index had dropped by 2.3% and that the Dow Jones Industrial Average had dropped by 2%. The Stoxx Europe 600 lost 1.5%. The MSCI Emerging Markets Index fell 0.7%. The MSCI Asia Pacific index fell 0.4%.
Coins
The Bloomberg Dollar Spot index rose 0.2%. The euro fell 0.2% to 1.174 US dollar, while the yen rose 0.4% to 110.34 dollars the dollar. The pound sterling is weakened by 0.3% to 1.3058 US dollar. The MSCI Emerging Markets Index decreased 0.2%.
Obligations
The 10-year Treasury yield declined by one basis point to 2.46%. Germany's 10-year rate fell by four basis points to a negative 0.04%.
Basic products
West Texas Intermediate fell 1.1% to 61.55 USD per barrel, after reaching its lowest level in more than five weeks. Gold rose 0.3% to 1,284 USD an ounce. The Bloomberg Commodity Index fell 0.4% after reaching its lowest level in about four months.
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