Markets fall after Trump’s about-face

Statement that deal may wait until post-election results in shock waves.

President Donald Trump on Tuesday made his most pessimistic comments in weeks regarding a trade deal with China, one day after ratcheting up tensions with Brazil, Argentina and France, sending chills through Wall Street.

Speaking on the first day of NATO’s 70th anniversary summit, Trump said he was open to waiting until after the 2020 elections to reach a trade deal with China, a sharp departure from his comments in October when he said a “Phase One” deal was nearly complete.

“In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right,” Trump told reporters Tuesday in London.

The Dow Jones industrial average declined 268 points, or 0.95%, to close at 27,783. The Standard & Poor’s 500-stock index dropped 27 points, or 0.86%, to close at 3,113. The Nasdaq composite was hit particularly hard, finishing at 8,567, a 97-point, or 1.1%, drop.

The downturn followed a rocky Monday on Wall Street, spurred by disappointing manufacturing and construction data and Trump’s notice that he would impose tariffs on steel and aluminum from Brazil and Argentina.

“We were reminded (Monday) that the manufacturing sector has been weak, and a good part of that weakness is attributable to uncertainty about Trump’s trade war,” said Ed Yardeni, president of Yardeni Research. “And today we’re reminded that it’s not over until it’s over.”