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Stocks looked set to tumble on Monday after the U.S. and China both accused each other of violating the 90-day trade truce they had brokered in Geneva last month.
Futures tracking the Dow Jones Industrial Average fell 153 points, or 0.4%. S&P 500 futures also dropped 0.4%, and contracts tied to the tech-heavy Nasdaq 100 were down 0.5%.
The three blue-chip indexes were on course to slide after China’s Ministry of Commerce said that the White House had “severely undermined” the consensus reached at the Geneva trade talks. The Commerce Ministry’s statement came after Trump said in a social-media post on Friday that China “has totally violated its agreement” with Washington.
Signs of a flare-up in trade tensions have put investors on edge. Trump also said on Friday that he would double tariffs on steel imports to 50%, serving up another reminder to the market that his stance on the levies could carry on shifting over the next few months.
“It is really hard to keep up or predict what’s going to happen on trade at the moment,” Deutsche Bank strategist Jim Reid said in a research note.. “For now it seems likely that the tariff uncertainty will linger for a long time ahead even if we’re still likely past the peak aggressiveness of U.S. policy.”
Yields on benchmark 10-year U.S. Treasury bonds climbed 3 basis points to 4.44%, and the yield on the 2-year note ticked up 1 basis point to 3.92% early Monday.
Gold prices jumped 2% to $3,383 per Troy ounce and the U.S. Dollar Index, which tracks the greenback against six other currencies, slipped 0.5%.
