Global stocks drop after Trump trade-war jitters spark US bloodbath

  • Asian markets tumbled Wednesday after President Donald Trump reignited trade-war tensions. His tweet Tuesday calling himself “Tariff Man” preceded a bloodbath in US stock markets. He later threatened “major tariffs” against China.
  • Trader sentiment has dragged as fears about global growth and the US economy resurfaced.

European equities took a hit Wednesday, following Asian stocks lower as economic and US-China trade-war jitters gripped financial markets.

In the US, the Nasdaq and the S&P 500 each tumbled more than 3.2% on Tuesday amid growing doubts that a trade deal could be thrashed out between the US and China. A wonky indicator called the “yield curve” also flattened, signalling a weaker outlook for economic growth and fears about a US recession.

President Donald Trump on Tuesday called himself “Tariff Man” on Twitter and later threatened to place “major tariffs” on Chinese goods entering the US, demolishing an uplift in market sentiment after last week’s G20 summit in Argentina.

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The Shanghai Composite index closed down 0.6% Wednesday. European shares followed, with the Euro Stoxx 50, Germany’s DAX, and France’s CAC all down 1%. Fears remain that a US-China trade deal will not be struck in the 90-day negotiating window agreed on by the two sides.

Some analysts suggested that Monday’s gains were overdone, given Trump’s previously barbed comments.

A minor relief rally in US index futures may be masking continued market uncertainty amid the longest bull market since the depths of the financial crisis.

“There is a strong chance now that the buy the dip mentality has flipped into a sell the rally approach,” said Neil Wilson, the chief markets analyst for

Oil-investor sentiment tracked that of equities. Brent crude was down 1.6% as of 8:45 a.m. in London (3:45 a.m. EST) as renewed uncertainty about Saudi Arabia’s plans to freeze or cut supply lingered on markets ahead of the OPEC summit set to take place in Vienna on Thursday.

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