Trade fears slam stocks, commodities, investors eye safety

Trade fears slam stocks, commodities, investors eye safety

Big industrial companies that are part of the index, such as Boeing and Caterpillar, suffered steep losses. S&P 500 futures were off 1 percent and Dow Jones futures were 1.1 percent lower.

Shanghai stocks staged a modest 0.3 percent recovery after tumbling almost 4 percent on Tuesday to a two-year low, buoyed by soothing comments from the central bank chief and in state media, and a burst of share purchase plans.

President Trump has asked officials to identify $200bn dollars-worth of Chinese goods to be subject to a 10% tariff in what is becoming an increasingly bitter trade war.

Investors sought safer investments, such as high-dividend companies like utilities and companies that make and sell household goods.

The euro traded at $1.1597, not far from a recent two-week low of $1.1543 after the European Central Bank suggested it would hold off raising interest rates through the summer of next year.

The White House has accused China of forcing USA companies to share advanced technology with Chinese partners as a condition of doing business there.

Miffed by Pompeo's comments, China today hit back saying that the U.S. is making allegations to cover up its unilateral protectionist policies.

Washington rescinded a ban on sales of US technology to ZTE after the company agreed to pay a $1 billion fine and hire American-picked compliance managers. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dropped by 3.3 basis points to 2.893 percent.

The market ructions and trade barbs also pose a challenge for China's push to boost the profile of the booming tech sector on mainland bourses.

US crude futures dropped 1.6 percent to $63.99 per barrel, briefly touching their lowest levels since April 10. Japan's Nikkei 225 Index plunged by 1.8 percent, while China's Shanghai Composite Index plummeted by 3.8 percent.

US stock markets are opening sharply lower Tuesday as tensions over trade between the USA and China seem closer to a boil.

Trump has angered Canada with his protectionist rhetoric, and has threatened to scrap the North American Free Trade Agreement (NAFTA) in favor of a new bilateral trade deal. He noted that China's Ministry of Commerce has already promised to retaliate with "comprehensive quantitative and qualitative measures" if the US imposes more tariffs.

In a separate statement, Lighthizer said that he supported Trump's action and that his agency "is preparing the proposed tariffs to offset China's action".

"You see what's happening with China", Trump said Tuesday during a speech to the National Federation of Independent Businesses.

Its Hong Kong-listed shares tumbled 25 percent to a two-year-low, while its Shenzhen shares fell by their daily limit of 10 percent for a fourth consecutive session.

The Canadian dollar weakened to a one-year low of C$ 1.3237 overnight, before paring some of its losses, as investors anxious about Canada's trade feud with the United States.

US and European equity markets looked set to follow Asia into the red.

On Friday, after the Trump administration's first tariff action, Beijing responded with reciprocal tariffs on $50 billion in USA goods, including cars, soybeans, dairy, oil, propane and other high-value trade categories.

Peter Navarro, a top trade adviser to U.S. President Donald Trump, said he's unaware of any tariff exemption for Apple Inc.'s iPhone in the growing trade spat with China. In April the Commerce Department blocked ZTE from buying USA components for seven years, a move that amounted to a death sentence for the company.

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