Already concerned before China retaliated, the market only freaked out further once Beijing officially clapped back, with the Dow Jones getting off to a truly horrible start to the week.
China announced that it was hiking tariffs on a number of different US products, the rates being lifted by anywhere between 5% and 25%. The majority are at the upper end of that band, with just shy of 2500 items being hit by the top tax. Perhaps even more worrying is the speculation by Global Time’s editor in chief Hu Xijin that China may also stop buying US agricultural products, as well as slashing its Boeing (NYSE:BA) orders, developments investors are going to be on high alert for in the next few sessions at least.
Unlike the aftermath of last Friday’s US tariff hike, which saw the markets naively rebound in the hopes that a deal could still be reached, there was no optimism on the ground this Monday. The Dow Jones lost more than 550 points, nearly double the 300 point drop forecast by the futures; that leaves the index under 25400 and on track for its worst close in 3 months.
The Eurozone indices, already in a bad shape, steadily saw their losses increase as the day went on, culminating in a 1.4% dive for the DAX, and a 1.3% collapse for the CAC. That puts the German and French bourses at 11900 and 5260 respectively.
The FTSE managed to stem its losses thanks to its oil gains, BP (LON:BP) and Shell (LON:RDSa) rising between 0.9% and 1.2%. However, the UK index was still down more than half a percent, striking 7170, a level last seen 2 months ago.
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