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Stocks Markets Tumble Amid Heightening Concerns Over Trade Stocks Markets Tumble Amid Heightening Concerns Over Trade
(about 2 hours later)
Global markets shuddered on Thursday as investors began to take seriously the prospect of a trade war between the world’s two largest economies.Global markets shuddered on Thursday as investors began to take seriously the prospect of a trade war between the world’s two largest economies.
Stocks in the United States fell for a second straight day, as President Trump announced $60 billion worth of annual tariffs on Chinese imports, and concerns about growing trade tensions mounted.Stocks in the United States fell for a second straight day, as President Trump announced $60 billion worth of annual tariffs on Chinese imports, and concerns about growing trade tensions mounted.
After wobbling throughout the day, the Standard & Poor’s 500 index turned decisively lower in the last hour of trading, closing down by 2.5 percent. That put the index into negative territory for the year. After wobbling throughout the day, the Standard & Poor’s 500-stock index turned decisively lower in the last hour of trading, closing down by 2.5 percent. That put the index into negative territory for the year.
The trade measures against China were the latest demonstration of Mr. Trump’s “America First” agenda, and were announced a day before tariffs on global steel and aluminum imports were expected to take effect.The trade measures against China were the latest demonstration of Mr. Trump’s “America First” agenda, and were announced a day before tariffs on global steel and aluminum imports were expected to take effect.
The potential ripples of the trade actions have unsettled investors.The potential ripples of the trade actions have unsettled investors.
Large exporters, whose fortunes could be harmed by a trade war, were hit especially hard on Thursday. Shares of Boeing, one of the country’s largest exporters, and Caterpillar, which counts China as an important market, both fell by more than 5 percent.Large exporters, whose fortunes could be harmed by a trade war, were hit especially hard on Thursday. Shares of Boeing, one of the country’s largest exporters, and Caterpillar, which counts China as an important market, both fell by more than 5 percent.
Shares of large technology companies, which already have been reeling in anticipation of tougher government oversight, also took a hit. Facebook, which has been contending with a crisis over data privacy, slumped by more than 2 percent. Alphabet, Google’s parent company, dropped by more than 3.7 percent.Shares of large technology companies, which already have been reeling in anticipation of tougher government oversight, also took a hit. Facebook, which has been contending with a crisis over data privacy, slumped by more than 2 percent. Alphabet, Google’s parent company, dropped by more than 3.7 percent.
Amid the dip in stocks, money flowed to government bonds as investors sought safety, briefly driving yields on the benchmark 10-year Treasury note below 2.8 percent. Yields move in the opposite direction of bond prices. Commodities heavily geared toward global growth also fell. The price of West Texas intermediate crude oil, the American benchmark, slipped 1.2 percent. Copper, an important industrial metal, dropped 0.9 percent.Amid the dip in stocks, money flowed to government bonds as investors sought safety, briefly driving yields on the benchmark 10-year Treasury note below 2.8 percent. Yields move in the opposite direction of bond prices. Commodities heavily geared toward global growth also fell. The price of West Texas intermediate crude oil, the American benchmark, slipped 1.2 percent. Copper, an important industrial metal, dropped 0.9 percent.
Thursday’s decline is the latest in a series of jolts to stock markets in the past two months.Thursday’s decline is the latest in a series of jolts to stock markets in the past two months.
After more than a year of calm, in which stock markets glided to one record high after another, a wave of volatility is suddenly cresting. There have been many causes of the turbulence this month and last. Investors initially were fearful that the economy was getting too strong, and that rising wages might cause inflation, which would push the Federal Reserve to hike interest rates faster than investors previously had expected. Those concerns have partly faded as recent economic data suggested that showed inflation remained in check. After more than a year of calm, in which stock markets glided to one record high after another, a wave of volatility is suddenly cresting. There have been many causes of the turbulence this month and last. Investors initially were fearful that the economy was getting too strong, and that rising wages might cause inflation, which would push the Federal Reserve to hike interest rates faster than investors previously had expected. Those concerns have partly faded as recent economic data showed that inflation remained in check.
More recently, market anxiety has shifted toward worries about geopolitics.More recently, market anxiety has shifted toward worries about geopolitics.
A growing public backlash against technology companies has increased the chances that lawmakers and regulators in the United States and elsewhere will intensify their scrutiny of them. Shares of those companies have helped propel markets to record highs, and their recent declines have led markets lower.A growing public backlash against technology companies has increased the chances that lawmakers and regulators in the United States and elsewhere will intensify their scrutiny of them. Shares of those companies have helped propel markets to record highs, and their recent declines have led markets lower.
Now, the prospect of a trade war between China and the United States, the two largest economies, has added to the gloomy sentiment. Among the concerns is that protectionism poses a risk to the health of the world economy. On Thursday, for example, the Bank of England warned that the erection of international trade barriers could have a “significant negative impact” on global growth.Now, the prospect of a trade war between China and the United States, the two largest economies, has added to the gloomy sentiment. Among the concerns is that protectionism poses a risk to the health of the world economy. On Thursday, for example, the Bank of England warned that the erection of international trade barriers could have a “significant negative impact” on global growth.
Stock markets around the world have reflected the worries. A leading European index, the Stoxx 600, fell more than 1.5 percent on Thursday. In Germany, whose economy is dependent on exporting products all over the world, the DAX index dropped 1.7 percent.Stock markets around the world have reflected the worries. A leading European index, the Stoxx 600, fell more than 1.5 percent on Thursday. In Germany, whose economy is dependent on exporting products all over the world, the DAX index dropped 1.7 percent.