Wall Street taking a beating Tuesday as optimism morphs into skepticism. There's growing doubt the so-called 90-day trade war truce between the US and China will end trade hostilities. Stocks dropped more than 3% across the board. The Dow tumbling 800 points, the Nasdaq slumping nearly 300 points, as Apple took another leg down.
In a series of tweets Tuesday, Trump said he wants to reach a deal with China, but if that fails, Trump declared, quote, I am a tariff man. Trump and Chinese President Xi Jinping agreed over the weekend at the G20 in Argentina not to increase tariffs for 90 days.
But officials in China have been silent since then, sparking speculation the two sides are further apart from a breakthrough than the Trump administration is portraying. Fear the global economy is already slowing because of the tariffs showing up in the bond market, where interest rates on shorter term government debt moved closer to the interest rate on the benchmark ten-year note.
Reuters fixed income correspondent Richard Leong.>> If this is gonna continue, what happen is that historically speaking, in the last 50 years, all the US recession has been preceded when what we call a
version happening. So the last time this has happened was in 2008 right before the crashing of the housing market, and we went into the great recession.
>> That played out particularly hard on financial stocks. Major banks like Morgan Stanley and Bank of America were both down more than 5%. Multinationals like Caterpillar and delivery companies UPS and FedEx were big losers as well as investors fear the trade spat may not be nearing an end.