Stocks Sink, Bonds Jump as Trump Dents Trade Hopes: Markets Wrap
(Bloomberg) — Stocks slumped around the world and bonds rallied after President Donald Trump aimed his tariff weapon on economies from South America to Europe and China, denting hopes for a global recovery.The S&P 500 Index extended a three-day rout to about 2.5% as the U.S. plans to move forward with tariffs on Chinese goods if no deal is reached before the mid-December deadline. Trump had earlier indicated he’d be willing to wait another year before striking an agreement with China. He also threatened tariffs on France after hitting steel from Brazil and Argentina.
Treasuries, gold, the yen and Swiss franc paced gains among haven assets. The cost to protect North American investment-grade debt against default touched the highest level in over a month as trade volatility shook markets. Jefferies warned currency traders to buckle up ahead of the Dec. 15 tariff deadline, saying “put your helmet back on.”
The flurry of trade news roiled global markets just as investors started dipping their toes into riskier waters. A rush to assets that usually outperform during times of economic growth pushed U.S. stocks to record highs last month. But renewed tariff tension and signs of profit deterioration could make traders again more cautious amid the longest bull market on record.
“The narrative on trade has quickly been turned upside down as negative headlines on tariffs have ignited a risk-averse tone in the markets,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “Today’s headlines are a short reminder of the downside risks that still remain across the investing landscape.”
Earlier on Tuesday, Chinese state media said the government would soon publish a list of “unreliable entities” that could lead to sanctions against U.S. companies.
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Elsewhere, oil rebounded as investors focused on the upcoming OPEC+ meeting that could lead to deeper supply cuts by some of the world’s biggest crude producers.
Here are some key events coming up this week:
- Germany releases factory-order data for October on Thursday.
- Saudi Aramco’s initial public offering is scheduled to be priced on Thursday, with Riyadh looking to raise more than $25 billion.
- Friday brings the U.S. jobs report, where estimates are for non-farm payrolls to rise by 190,000 in November.
These are the main moves in markets:
- The S&P 500 dipped 1% to 3,082.90 at 12:42 p.m. New York time.
- The Stoxx Europe 600 Index lost 0.6%.
- The MSCI Asia Pacific Index fell 0.3%.
- The Bloomberg Dollar Spot Index decreased 0.1%.
- The euro advanced 0.1% to $1.1089.
- The Japanese yen rose 0.4% to 108.53 per dollar.
- The yield on 10-year Treasuries slid 12 basis points to 1.70%.
- Germany’s 10-year yield sank seven basis points to -0.35%.
- Britain’s 10-year yield fell seven basis points to 0.67%.
- The Bloomberg Commodity Index rose 0.5%.
- West Texas Intermediate crude advanced 0.3% to $56.14 a barrel.
- Gold gained 1.1% to $1,485.40 an ounce.
–With assistance from Joanna Ossinger, Andreea Papuc, Todd White, Sam Potter, Yakob Peterseil, Sophie Caronello, Sarah Ponczek and Luke Kawa.