Global stocks plunge lower after Trump’s sparks US bloodbath

Global
stocks tracked a brutal day in US stock
markets.
AP Photo/Richard
Drew

• Asian markets tumble after Trump signals reignited
  trade-war tensions, following a bloodbath in US stocks
  markets.
• 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 economy and US-China trade-war jitters gripped financial
markets. 

In the US, the Nasdaq and S&P 500 each tumbled more than 3.2%
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, signaled a weaker outlook for
economic growth and fears about a recession.

President Donald Trump on Tuesday 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 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, chief markets analyst for markets.com. 

Oil investor sentiment tracked that of equities. Brent
crude is down 1.6% as of 8.45 a.m in London (3.45 a.m EST) as
renewed uncertainty about the substance of potential supply
freezes or cuts from Saudi Arabia lingered on markets ahead of
OPEC’s summit in Vienna on Thursday.