Monday , June 5 2023

U.S. Stock Slide, Bonds Surge on Fresh Tariffs: Markets Wrap


(Bloomberg) – A recent salvo in President Donald Trump's US-China trade war has swelled financial markets a day after the Federal Reserve delivered the first interest-rate cut in a decade in part to counteract the effects of the spat on global growth.

Shares slipped more than 1.9% from gains to losses after Trump said the US would get a 10% tariff on $ 300 billion in Chinese goods since September 1. 10-year Treasury yields dropped to their lowest level since 2016, while two-year rates plunged 15 basis points while traders increased Fed reduction bets to another half-point this year. The yen rose most in two months against the dollar, while crude fell more than 8%, being the worst day in four years.

Banks lead losses on securities with Bank of America falling most in more than two months. The declines have spread across sectors such as the global industrial company Caterpillar Inc. and the consumer brand Nike Inc. reduced the Dow Jones Industrial Average.

"Anyway you cut it, scaling the whole megillah, meaning the additional $ 300 billion starting at 10%, means it will only get worse and that will be a defining moment in this trade war where it will emerge at the consumer level." Said Arthur Hogan, chief marketing officer of National Securities Corp., "This is not good news for the market. We are just seeing the beginning of what the market reaction will look like."

Shares were countered by the Fed-led market Wednesday before Trump put business back into the center of investment minds. The tariffs come after US-Sino negotiations earlier in the week ended without much progress, prompting the US president to push tariffs up to 25% on $ 250 billion over months.

Here are some of the key events to watch as the week unfolds:

The US July jobs report ends Friday

Here are the main moves in markets:


The S&P 500 Index fell 0.9% at 2:34 p.m. New York time, the largest two-day slide in more than two months. The Stoxx Europe 600 Index rose 0.5%. The MSCI Emerging Market Index sank 0.6%. The MSCI Asia Pacific Index fell 0.2%.


The Bloomberg Dollar Index fell 0.1%. The euro changed slightly to $ 1,1079. The Japanese yen rose 1.23% to 107.52 per dollar, the largest rise since May 31.


The yield on a 10-year Treasury fell 12 basis points to 1.89%. The two-year rate lost 15 basis points to 1.72%. Britain's 10-year yield fell two basis points to 0.59%.


Gold rose 0.9% to $ 1,450.90 per ounce. The largest crude Texas Middle East decreased 7.9% to $ 53.95 a barrel, the largest decline since February 2015

– With the help of Laura Curtis, Vildana Hajric, Sophie Caronello and Olivia Rinaldi.

To contact the reporters on this story: Randall Jensen in New York at [email protected]; Sarah Ponczek in New York at [email protected]

To contact the editors responsible for this story: Jeremy Herron at [email protected]; Samuel Potter at [email protected], Robert Brand

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