Somewhat predictably the trade war fears draining the European session infected the US open on Tuesday.
Returning from the Labour Day break in a bad mood, the Dow Jones fell 100 points after the bell, plunging back towards 25900 (and, at points, dropping as low as 25800). Not only is the Dow dealing with the likelihood Donald Trump is preparing to impose tariffs on a further $200 billion of Chinese imports once the deadline for public consultation on the plan ends on Thursday – a move that will no doubt provoke a response from Beijing – the index is also suffering in the face of investors fleeing to the safety of the dollar.
The greenback was on a tear this Tuesday. Against the pound it rose 0.4%, forcing cable under $1.2825, while taking 0.7% off the euro. Yet this failed to help the European indices ease their losses, with the region firmly in the red.
The FTSE fared best, and even then that meant the index shed more than half a percent, tumbling back towards 7460 having crossed 7500 on Monday. The DAX, meanwhile, lost 130 points, and is in danger of ducking under 12200, while the CAC slipped below 5350 after falling 1.2%.
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