Investors remained concerned as Wednesday went on, the uncertainties ahead of the potentially week-defining summit between Donald Trump and Jean-Claude Juncker dragging the markets into the red.
Having ridden the Alphabet (NASDAQ:GOOGL) wave to a 6 week high on Tuesday, the Dow Jones pulled back as the bell rang on Wall Street, the index slipping 90 points as the same fears that infected the European markets spoiled the US open.
Over in the eurozone the losses were slightly more pronounced. While CAC managed to hold above 5400 after falling 0.4%, the DAX ended up dropping 0.8%, falling from the 12700-plus levels struck during yesterday’s trading.
As for the FTSE, it fell 0.7%, returning to the 7650 to 7700 bracket that has sort of become its home in the second half of July. For the UK index the main weight was its commodity and banking stocks, both sectors tripping into the red as investors fret over how bellicose Trump might be on Wednesday night.
The big question is whether these losses are a precursor to a more severe decline on Thursday. That’s going to be dependent on how the Wednesday Night Main Event: Trump vs Juncker pans out.
The fact the President tweeted ‘Tariffs are the greatest!’ ahead of the get-together suggests Juncker has a tough task on his hands to try and avert a US-EU trade war. On the other hand, expectations are likely so low for a positive outcome that even the slightest bit of reconciliation might garner an over-sized reaction from the markets.
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