Home Business Markets Wall Street spooked by trade truce

Wall Street spooked by trade truce

And the ASX is set to open lower as a result.

Azal Khan

Digital Journalist, Your Money

Wall Street fell more by than three per cent overnight, led by ongoing investor scepticism over the trade truce between US President Trump and China’s President Xi Jinping.

The Dow Jones slid 3.1 per cent, the S&P 500 3.2 per cent, and the Nasdaq 3.8 per cent, leading to one US stocks ETF (Exchange Traded Fund) managed by Russell Investments experiencing its largest one-day drop since 2011.

Concerns are mounting over the lack of meaningful progress on the US-China trade talks, after Trump suggested on Tuesday that he may extend the 90-day trade truce with China.

Trump made it clear he would revert to protectionism if the two sides could not resolve their differences, taking to Twitter to issue a warning with investment implications. 

Pepperstone’s Chris Weston told Business Breakfast investors are viewing the truce as a “band-aid plastering over the cracks, [that] doesn’t see anything change”.

“You’ve got a three prong situation, one with Trump going after Amazon, being a market darling,” he said.

“The market is fairly confused with Fed communication, and then of course you’ve got that perhaps the trade wars have already done their damage, that’s why we are seeing a flatter curve.”

Get more news, analysis and insights straight to your inbox!

By clicking subscribe, you accept our privacy policy.