US stocks plum­met over lack of clar­ity on trade deal with China

The Daily Telegraph - Business - - Front Page - By Wil Crisp

US STOCKS have nose­dived amid con­cerns about trade and fears of a weak­en­ing econ­omy.

The Dow Jones closed down by more than by 3pc in New York yes­ter­day, with in­dus­tri­als and fi­nan­cials lead­ing the de­clines. The broader S&P 500 was also off 3.2pc.

Trade-sen­si­tive shares were un­der­mined by a fail­ure from Don­ald Trump’s aides to de­tail the deal he had struck with China, erod­ing con­fi­dence in the agree­ment, which still doesn’t ex­ist on pa­per and hasn’t been con­firmed by Beijing.

Speak­ing about the deal, Trump’s most se­nior eco­nomic ad­viser Larry Kud­low di­alled back ex­pec­ta­tions about the agree­ment.

“I’ll call them ‘com­mit­ments’ at this point, which are … not nec­es­sar­ily a trade deal, but it’s stuff that they’re go­ing to look at and pre­sum­ably im­ple­ment,” Mr Kud­low said. He also said that he “didn’t yet have a spe­cific agree­ment” on car tar­iffs, ap­par­ently con­tra­dict­ing a tweet by Trump the pre­vi­ous day, which said: “China has agreed to re­duce and re­move tar­iffs on cars com­ing into China from the US”.

Con­cerns about a weak­en­ing US econ­omy saw the yield on three-year US Trea­sury bonds climb above those of their five-year equiv­a­lent this week, the first time in seven years that the yield curve has in­verted. This is gen­er­ally con­sid­ered a indicator of an con­trac­tion.

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