US stocks join sell-off on worries over economy, trade
Most analysts still expect Beijing and Washington to strike a trade deal
NEW YORK: Wall Street stocks fell early Wednesday, joining a global sell-off, as recession fears and angst over the protracted US-China trade war weighed on sentiment.
Investors eyed with alarm another steep drop in the yield on the 10-year US Treasury bond, which tumbled below the yield on the three-month US Treasury bond, a dynamic seen by economists as a predictor of recessions.
About 15 minutes into trading, the Dow Jones Industrial Average stood at 25,150.82, down 0.8 per cent.
The broad-based S&P 500 shed 0.7 per cent to 2,781.55, while the tech-rich Nasdaq Composite Index slid 0.9 per cent to 7,540.84.
Adding to the troublesome developments in the bond market, Chinese state media dangled the threat that Beijing could cut exports of rare earths to the United States as a counter-strike in the trade war, potentially depriving Washington of a key resource used to make everything smartphones, military hardware and other crucial electronics.
Most analysts still expect Beijing and Washington to strike a trade deal but anxiety is mounting over the possibility that talks could fall apart.
On Monday, JPMorgan Chase Chief Executive Jamie Dimon said the conflict “has gone from being a kind of skirmish to being far more than that” during an appearance at an investment conference.
“If this goes south in a bad way,” Dimon added, “that obviously could slow down business investment and cause uncertainty of all different types.”