Markets Right Now: US stocks dive as trade jitters return

Markets Right Now: US stocks dive as trade jitters return

Wall Street closed weaker yesterday.

The S&P 500 Index lost 90.31 points, or 3.2%, while the Nasdaq Composite dropped 283.09 points, or 3.8%.

Defensive Utilities .SPLRCU eked out a 0.2 percent gain, the only one of the 11 major S&P 500 sectors in positive territory. Germany's DAX lost 1.1 per cent, while France's CAC 40 dropped 0.8 per cent.

On Wall Street, investors' confidence in the U.S.

Eastern Time. The Dow Jones Industrial Average dropped 206 points, or 0.8 percent, to 25,619.

The technology sector fell 2.80%, while industrials dropped 3.47% over a lack of specifics on the Sino-US trade truce, including no written commitments and when the truce period starts. Tech companies, banks and exporters including Boeing and Caterpillar all declined. The market gained Monday after the Trump administration said USA and China agreed to a temporary cease-fire in a trade dispute. -China trade cease-fire. That revived fears their tariff battle could chill global economic growth.

On Tuesday, President Trump has declared himself a "Tariff Man" in tweeting about the state of progress with China, doubling down the threat to raise tariffs on Chinese goods if a deal isn't solidified. That made the weekend agreement seem even less likely to produce a long-lasting settlement.

FED WATCH: Markets also got a jolt from remarks by the president of the Fed's NY regional bank. During a briefing with reporters, John Williams said given his outlook for strong economic growth, he expects "further gradual increases in interest rates will best sponsor a sustained economic expansion".

Canada arrests CFO of Chinese tech giant Huawei
However, according to the Globe and Mail , she was arrested on suspicion she violated USA trade sanctions against Iran. Meng Wanzhou, daughter of company founder Ren Zhenfei, and a vice chair of Huawei Technologies .

The comments came after those from Fed chair Jerome Powell last week, which lifted stocks as they were interpreted as suggesting a less aggressive path of rate hikes.

The jitters helped drive demand for government bonds today, pushing prices higher. The yield on the 10-year Treasury note fell to 2.95 percent from 2.99 percent late Monday.

"You have the drop in bond yields and the implications on growth going forward", said Willie Delwiche, investment strategist at Baird.

Analysts said Tuesday's decline in stocks also reflected rising skepticism about a weekend announcement that US President Donald Trump meant to halt new tariffs on China for 90 days while the two countries work out a long-term trading deal. "Concerns were also compounded by increasing news narrative on inverted curves and risks of a recession".

Large banks were among the big losers, with JPMorgan Chase shedding 4.4 per cent, Bank of America losing 5.4 per cent and Citigroup 4.4 per cent. The contract rose 30 cents on Tuesday to close at $53.25.

Encana Corp. lost 3.6 per cent, while Crescent Point Energy Corp. was down 2.3 per cent. It gained 39 cents the previous session to $62.08.

CURRENCY: The dollar gained to 112.95 yen from Wednesday's 112.78 yen. The euro strengthened to $1.1349 from $1.1342.