Stocks plunge on Wall Street as US-China trade war escalates

Stocks plunge on Wall Street as US-China trade war escalates

Stocks edged higher on Wall Street Tuesday, a day after their worst loss of the year, as China eased some of the pressure in its trade war with the U.S.by stabilizing its currency.

They responded Monday by dumping stocks and shoveling money into USA government bonds, which are considered ultra-safe.

The yield on the 10-year Treasury note, which rises with expectations of stronger economic growth and inflation, fell to its lowest level since Trump's 2016 election energized markets, down to 1.75% from 1.85% late Friday.

Technology companies, which would stand to suffer in a protracted trade war, took the biggest losses.

All Dow components companies traded at red territory with Apple erasing 5.23 per cent and leading the laggards.

At 9:50 a.m. ET, the Dow Jones Industrial Average was down 505.65 points, or 1.91%, at 25,979.36, the S&P 500 was down 59.19 points, or 2.02%, at 2,872.86.

The Standard & Poor's 500 index dropped 3% to 2,844.74.

China, which has traditionally managed its forex, the yuan, allowed it to tumble to its lowest level on Monday against the buck in additional than a decade.

Major U.S. indexes logged their biggest declines of the year with the Dow Industrial Average losing more than 760 points, or about 3%.

"They can make it much more hard for United States companies to sell goods and services in China", Quincy Krosby, chief market strategist at Prudential Financial, told The Post.

The U.S. has lengthy complained in regards to the weak point of China's foreign money, and Monday's drop introduced the yuan previous a stage that merchants noticed as an necessary psychological benchmark, at seven per $1.

In Asia, where tensions between Seoul and Tokyo are worsening in a trade dispute entirely separate from Washington's and Beijing's, Japan's Nikkei 225 index fell 1.7%, and South Korea's Kospi lost 2.6%. In the US, the Dow Jones industrial average slumped 3%. Eight other sectors fell by at least 2%.

Declining issues outnumbered advancers for a 7.11-to-1 ratio on the NYSE and for a 7.20-to-1 ratio on the Nasdaq.

"After trade talks broke up later in the day, USA officials said they were preparing to expand those tariffs to cover another $300 billion of goods, covering most imports from China", reports Fox News.

Trader Timothy Nick, right, works on the floor of the New York Stock Exchange, Monday, Aug. 5, 2019.

Apple Inc slid 4.1% as analysts expected the newly proposed tariffs to hurt demand for its flagship iPhone, while the Philadelphia chip index slipped 3.5%.

The market last week was battered by the Federal Reserve's decision to cut interest rates by only one-quarter of a percentage point, Fed chair Jerome Powell's announcement that the July cut was not the beginning of a major rate-cutting cycle, and the announcement Thursday by President Donald Trump that tariffs would be extended to $300 billion of Chinese imports.

The S&P 500 fell 68 points, or 2.3%, to 2,863. Gold prices jumped by more than one percent to hit their highest level in more than six years today, while the Japanese yen and core government bonds also increased.

Trump tweeted Thursday that he would place an additional 10 percent tariff on the remaining 300 billion US dollars worth of Chinese imports starting on September 1.

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