U.S. stocks drop on China trade worries; Argentine peso roiled
The rally in U.S. stocks came to a halt on Thursday on new concerns that the U.S.-Chinese trade dispute will intensify, while economic turmoil in Argentina and Turkey sent those countries` currencies tumbling.
Stock markets and major government bond yields have risen in recent weeks on hopes that a global trade war could be averted, particularly as leaders of the United States and Canada expressed optimism they could reach a new North American Free Trade Agreement by Friday.
Investor sentiment darkened, however, on the prospect that a new round of U.S. tariffs on Chinese goods may likely take effect in September.
President Donald Trump has told aides he wants to move ahead on a plan to impose tariffs on Chinese imports worth $200 billion next week, Bloomberg News reported.
"It`s not surprising that the administration would push on China at this point," said Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute in Winston-Salem, North Carolina.
As a result, she said, "There`s added uncertainty as to whether or not imports are going to be more expensive for the U.S. consumer, and if imports are more expensive, what implications they have for inflation."
The Argentine peso
The International Monetary Fund on Wednesday said it was studying a request from Argentina to speed up disbursement from a $50 billion loan program, but still wants Argentina to adopt stronger fiscal and monetary policies.
U.S. Treasury yields fell further on Thursday as investors moved to safe havens following the report of Trump`s tariffs plan and the Argentine peso`s tumble. The yields had declined earlier after a measure of underlying inflation just managed to hit the Federal Reserve`s 2 percent target.[US/]
Benchmark 10-year U.S. Treasury notes
The Dow Jones Industrial Average <.dji> fell 177.95 points, or 0.68 percent, to 25,946.62, the S&P 500 <.spx> lost 17.15 points, or 0.59 percent, to 2,896.89, and the Nasdaq Composite <.ixic> dropped 33.85 points, or 0.42 percent, to 8,075.84.
The MSCI world equity index <.miwd00000pus>, which tracks shares in 47 countries, fell from a five-month high and was down 0.6 percent.
The dollar index <.dxy> rose 0.15 percent, with the euro
Earlier, European shares fell on concerns over the effects on trade tensions between the United States and China, including reduced Chinese demand for exports. A pan-European stock index <.stoxx> closed down 0.3 percent.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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