Stocks sell off on escalating trade jitters

Market trims losses after National Trade Council director Peter Navarro calms concerns about a trade war

Jun 25, 2018 @ 4:24 pm

By Bloomberg News

Escalating trade tensions sent U.S. stocks to their steepest drop since early April on Monday, as President Donald J. Trump's threats of more protectionism against major partners were met with Chinese and European vows of retaliation.

The S&P 500 Index fell 1.4%, though comments from National Trade Council director Peter Navarro brought the measure back from losses that had topped 2%. The Dow Jones Industrial Average closed below its 200-day moving average. Selling was heaviest in tech shares, with the Nasdaq 100 Index sinking 2.2%.

Equities tumbled around the world on reports that the U.S. Treasury will propose limits on Chinese technology investment, straining already tense relations between the world's two largest economies. Mr. Navarro said on CNBC that there were no plans to impose restrictions, sparking a late-day rebound. China and Europe warned the escalating trade war could trigger a global recession.

The selling in American stocks spread from Asia, where equities in Shanghai and Hong Kong declined despite China's central bank freeing up liquidity in the banking system. European shares also tumbled, with the Stoxx 600 Index down 2.1%. Political concerns hit Italian bonds and stocks after the nationalist League party won municipal elections. Emerging-market equities slid. U.S. crude pushed toward $69 a barrel. After an early surge, Turkey's lira swung between gains and losses as traders digested Recep Tayyip Erdogan election victory.

The rising tensions have weighed on stocks ahead of the second-quarter earnings season that so far has seen estimates keep rising. Daimler dented that notion last week, warning that tariffs will lower its profits. Germany's DAX Index was among the worst performers of the region's stock gauges as data showed business sentiment slipped. Automakers were the big losers after more tariff threats from Mr. Trump at the end of last week.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

The capacity conundrum: Why its hampering your growth

How do you get good next gen talent to your firm to help open up more capacity? Live Oak's Mike McGinley has the answer.

Latest news & opinion

Q&A with Abigail Johnson and Kathleen Murphy of Fidelity Investments

The Fidelity CEO, along with the president of personal investing, discuss record earnings, allegations of sexual misconduct and the challenges facing a changing industry.

Fight for New Jersey fiduciary rule yields doomsday rhetoric from both sides

Stakeholders warned of a 'crisis' and 'decimation of our financial system' at a public meeting held by the New Jersey Bureau of Securities.

The Women’s Issue

News, video and expert opinion about women in financial advice

Meet the 2018 Women to Watch

These female financial advisers and other industry leaders are recognized for their successes and support of other women in the financial advice business.

Some good news about female recruitment in financial advice

Each of four core advisory positions tracked in InvestmentNews' benchmarking study has seen an uptick in women entrants.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print