Stocks Slide as U.S.-China Trade Tensions Build: Markets Wrap
Source: Bloomberg
Stocks fell and bonds gained as President Donald Trump moved the U.S. closer to a trade war with China, while investors weighed diverging monetary policies from the Federal Reserve and European Central Bank.
The S&P 500 opened lower after the U.S. announced a list of $50 billion of Chinese goods targeted for tariffs and China said it would have to respond. Trade-sensitive sectors including tech hardware led the decline. The Stoxx Europe 600 Index also headed lower, erasing an earlier advance.
“It doesn’t look like investors really believe we’re going into a full-blown trade war, but we’re going into a full-blown trade skirmish,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group LLC in Pittsburgh. “Because we’re going to put some tariffs on China, China’s putting tariffs on us, and this is the market saying we’re not super happy about this turn of events.”
Treasury yields dipped and Italian debt led a rally in European bonds, which was triggered a day earlier by the ECB ruling out a rise in interest rates until the second half of 2019. The euro gained after Thursday’s slump and the dollar was steady.
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Read more: https://www.bloomberg.com/news/articles/2018-06-14/asian-stocks-set-for-gains-dollar-strengthens-markets-wrap
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