US stock markets fall after Donald Trump’s words on China
US stock markets have fallen today after President Donald Trump said his administration was “not ready to make a deal” with China.
The tech-heavy Nasdaq stock index had fallen 1.2 per cent, the S&P 500 had dropped one per cent, and the Dow Jones industrial average had fallen 0.9 per cent.
Speaking at the White House, Trump said: “Were doing very well with China, were talking with China. Were not ready to make a deal, but well see what happens.”
Stock markets have been increasingly sensitive to any news to emerge about the trade war raging between the two sides.
A sell-off sent them tumbling earlier this week when the Chinese renminbi currency fell to the seven-per-dollar level not seen since the financial crisis, sparking fears of a currency war.
The renminbi was allowed to slide over 1.5 per cent by the Chinese government after the Trump administration slapped 10 per cent tariffs on $300bn of Chinese goods. This means almost all imports from China are tariffed.
US stock markets fell today despite official figures showing a decline in core producer prices in July, two months after Trump ratcheted up tariffs on $200bn of US goods to 25 per cent.
“There is still little evidence that Mays increase in the tariff rate on $200bn of Chinese imports is having any significant impact on firms costs,” said Andrew Hunter, senior US economist at Capital Economics.
“That makes it a little more likely that Fed officials will react to any further signs of weakness in the real economy by cutting interest rates aRead More