Earlier in the week, Beijing let the yuan breach that 7-per-dollar level for the first time in 11 years, shortly after President Trump threatened to impose more tariffs on Monday//CRIMSON TAZVINZWA
- The Dow Jones Industrial Average is bracing for a rocky opening on Wednesday, as concerns about the on-going trade war between the US and China persist
- As of Wednesday morning, Dow’s future losses indicated a staggering drop of 500 points. S&P 500 and Nasdaq 100 futures also pointed towards a sharp drop
- Earlier in the week, Beijing let the yuan breach that 7-per-dollar level for the first time in 11 years, shortly after President Trump threatened to impose more tariffs
- The modest adjustment in global exchange rates appeared to have a seismic effect on Wall Street, prompting an anguished response from Trump
- Despite the yaun stabilization, investors were still provided with a nail-biting preview of what an escalating trade war might entail
The US stock market dropped sharply Wednesday with the Dow plunging 500 points on opening and government-bond yields tumbling around the world as concerns about the ongoing trade war between the US and China continue to decimate Wall Street confidence.
Following one-day of respite, the panic over trade seemed to reignite all over again with the 10-year US government bond yield tumbling to a near three-year low of 1.6298 percent, as investors poured money into bonds out of fear the trade war could slow global growth.
As of Wednesday morning, Dow’s futures losses indicated a staggering drop of 2.3 percent. S&P 500 and Nasdaq 100 futures also down 0.5 percent and 0.4 percent respectively.
When asked about recent market volatility on the White House lawn on Wednesday, Trump said: ‘I think the market reaction is to be expected. I might have expected it even more. At some point, as I said, we have to take on China. They’ve been taking us to the cleaners for 25 years.’
Despite the fallout, gold appears to be winner of the chaos as investors sought safe assets. Prices edged toward $1,500 an ounce for the first time since 2013 – up nearly 17 percent this year and rising 1.4 percent on Wednesday.
Shares of technology companies, including Apple Inc and chipmakers, were higher before the bell. The iPhone maker’s shares rose 0.8 percent, while those of Intel Corp, Advanced Micro Devices Inc and Nvidia Corp gained more than 1 percent.
At 9.57am ET, the Dow was down 461.62 points, or 1.77 percent, at 25,567.90, and the S&P 500 was down 42.25 points, or 1.47 percent, at 2,839.52. The Nasdaq Composite was down 96.50 points, or 1.23 percent, at 7,736.77.
With the second-quarter earnings season winding down, about 73% of the 426 S&P 500 companies that have reported results so far have topped earnings estimates.